German medical packaging firm Gerresheimer to sell two units to Apax for $1.71 billion
Gerresheimer's Strategic Sale of Packaging Units
Overview of the Transaction
July 29 (Reuters) - German drug packaging firm Gerresheimer said on Wednesday it was selling two plastic packaging units, including the U.S business Centor, to private equity group Apax Funds for €1.5 billion ($1.71 billion) including debt.
Background and Reasons for the Sale
Accounting Investigations and Financial Impact
The sale follows internal investigations into Gerresheimer's accounting practices, which delayed its financial results and led to its removal from Deutsche Boerse's SDAX small-cap index earlier this year. Germany's financial regulator, BaFin, also opened audits of the company's financial statements.
Business Performance of the Units
The two packaging units generated combined revenue of approximately €570 million last year and employ around 2,400 people, Gerresheimer said.
Details of the Sale
Scope of the Transaction
The company started the Centor sale process in February as it sought to improve its capital structure. The sale also includes the global Primary Packaging Plastics unit, Gerresheimer said on Wednesday.
Use of Proceeds
"Gerresheimer will use the expected cash inflows to significantly optimise its capital and financing structure by meaningfully decreasing its leverage," the company said in a statement.
Assets and Sites Involved
As part of the deal, Apax will acquire Gerresheimer's 15 production sites for primary plastic packaging in nine countries and Centor's U.S. production site.
Other Strategic Decisions
Rejection of Takeover Bid
The drug packaging firm rejected a takeover bid from U.S. rival Silgan in April, choosing to focus on resolving its accounting problems and selling its U.S. subsidiary Centor, Reuters had reported.
Progress on Accounting Review
Gerresheimer said last month that its internal accounting review was complete, though its assessment of possible damages claims was still ongoing.
Timeline and Financial Details
Expected Closing Dates
The sale of Centor is expected to close by the end of financial year 2026 and the global Primary Packaging Plastics business sale in the first half of 2027.
Currency Exchange Rate
($1 = 0.8776 euros)
Reporting Credits
(Reporting by Anusha Shah in Bengaluru; Editing by Mrigank Dhaniwala and Subhranshu Sahu)
