Tredegar Agrees to Sell Personal Care Films Business to Fitesa
August 25 2020 - 8:19AM
Business Wire
Tredegar Corporation (NYSE:TG) announced today that it has
agreed to sell its personal care films (“Personal Care Films”)
business to affiliates of Fitesa S.A. The Personal Care Films
business, which is currently reported by Tredegar within the
personal care component of its PE Films segment, has approximately
400 employees worldwide and includes manufacturing sites located in
Terre Haute, Indiana; Kerkrade, The Netherlands; Rétság, Hungary;
Diadema, Brazil; and Pune, India. The proposed transaction excludes
the packaging film lines and operations relating to the Pottsville,
Pennsylvania manufacturing site currently reported by Tredegar
within the personal care component of its PE Films segment
(“Pottsville Packaging”).
Cash proceeds from the sale net of transaction costs, purchase
price adjustments and transition services are estimated at $40 to
$45 million. Net cash income tax costs or benefits relating to the
transaction are expected to be negligible.
For the 12 months ended June 30, 2020, net sales and EBITDA from
ongoing operations for the Personal Care Films business to be sold
were $133 million and negative $1.7 million, respectively.
For the 12 months ended June 30, 2020, net sales and EBITDA from
ongoing operations for the Pottsville Packaging business to be
retained by Tredegar were $23 million and positive $7.0 million,
respectively. Tredegar also estimates that approximately $3 million
of certain PE Films segment annual shared services costs previously
allocated to Personal Care Films will not be eliminated in the
transaction.
Closing of the transaction, which is contingent upon the
satisfaction of customary conditions, including competition filings
in various countries where Tredegar and Fitesa do business, is
expected to occur during the fourth quarter of 2020. The Personal
Care Films business, with a carrying value of net assets of
approximately $70 million, is expected to be reported as a
discontinued operation beginning in the third quarter of 2020 and a
non-cash accounting loss is expected to be recognized at that time.
Tredegar’s surface protection component of its PE Films segment,
with manufacturing at the Pottsville facility as well as in
Guangzhou, China, will add Pottsville Packaging to its
responsibilities.
Tredegar Corporation is a manufacturer of plastic films and
aluminum extrusions. A global company headquartered in Richmond,
Virginia, Tredegar had 2019 sales of $1 billion. With approximately
3,000 employees, the company operates manufacturing facilities in
North America, South America, Europe, and Asia.
Fitesa is one of the leading and largest global manufacturers of
nonwovens. It provides innovative solutions for the hygiene and
healthcare markets using a broad range of nonwoven technologies,
that include spunbond, carded, airlaid and elastic films and
laminates. Headquartered in Porto Alegre, Brazil, Fitesa employs
over 2,000 people in 16 manufacturing locations across 10
countries: Brazil, Peru, Mexico, Italy, Sweden, Germany, United
States, United Arab Emirates, Thailand and China.
Forward-Looking Statements
Some of the information contained in this press release may
constitute “forward-looking statements” within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. When we use the words “believe,” “estimate,”
“anticipate,” “appear to,” “expect,” “project,” “plan,” “likely,”
“may” and similar expressions, Tredegar does so to identify
forward-looking statements. Such statements are based on Tredegar’s
then current expectations and are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from those addressed in the forward-looking statements. It is
possible that actual results may differ, possibly materially, from
the forward-looking statements provided in this press release.
Accordingly, you should not place undue reliance on these
forward-looking statements. Factors that could cause actual results
to differ from expectations include, without limitation, the
following: Tredegar’s inability to complete the proposed
transaction in a timely manner (or at all) and at the prices it has
assumed; possible disruptions to customer and employee
relationships and business operations caused by the proposed
transaction; the ability to achieve the levels cost savings and
operational improvements anticipated; and the other factors
discussed in the reports Tredegar files with or furnishes to the
Securities and Exchange Commission (the “SEC”) from time to time,
including the risks and important factors set forth in additional
detail in “Risk Factors” in Part I, Item 1A of Tredegar’s Annual
Report on Form 10-K for the year ended December 31, 2019 and in
Part II, Item 1A of Tredegar’s Quarterly Report on Form 10-Q for
the period ended March 31, 2020. Readers are urged to review and
consider carefully the disclosures Tredegar makes in its filings
with the SEC.
Tredegar does not undertake, and expressly disclaims any duty,
to update any forward-looking statement made in this press release
to reflect any change in management’s expectations or any change in
conditions, assumptions or circumstances on which such statements
are based, except as required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200825005561/en/
Neill Bellamy Phone: 804-330-1211 E-mail:
neill.bellamy@tredegar.com
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