Tredegar Corporation has announced its agreement to divest its flexible packaging films division, known as "Terphane," to affiliates of Oben Group for a net debt-free consideration of $116 million. Terphane represents the entirety of Tredegar's flexible packaging segment and employs approximately 500 individuals. It operates manufacturing facilities in Cabo de Santo Agostinho, Brazil, and Bloomfield, New York, with its headquarters situated in São Paulo, Brazil. Terphane exports its products to 29 countries.

Upon completion of the transaction, Tredegar anticipates realizing after-tax cash proceeds of $85 million. This figure accounts for factors such as projected Brazil withholding taxes, escrow funds, U.S. capital gains taxes, and transaction expenses. It's worth noting that actual after-tax proceeds may vary due to potential changes in deductions throughout the interim period leading up to the closing date, which is estimated to fall between 8 and 14 months.

For the 12 months ending on June 30, 2023, Terphane reported net sales of $152 million and EBITDA from ongoing operations totaling $16.4 million.

The closing of this transaction remains contingent upon the fulfillment of customary conditions, including clearance by competition authorities in Brazil and Colombia.

John Steitz, Tredegar's President and CEO, expressed his belief that the acquisition of Terphane by Oben will enhance the scale and growth prospects in the fiercely competitive global flexible packaging market.

Gonzalo Belaunde, CEO of Oben, expressed excitement about the agreement to acquire Terphane, emphasizing its significance as a producer of BOPET films in Brazil. This acquisition is expected to bolster Oben's position as a global player in the highly competitive flexible films industry by expanding production capacity for BOPET films and providing a solid platform for expanding capacity for other films, particularly BOPP, in both the U.S. and Brazil. Belaunde also anticipates synergies resulting from the transaction to enhance their client services. He looks forward to welcoming Terphane's employees to the Oben team.

J.P. Morgan Securities LLC is acting as Tredegar's financial advisor, and Hunton Andrews Kurth LLP is providing legal counsel in the United States for Tredegar.

Tredegar, an industrial manufacturer, operates three primary businesses: custom aluminum extrusions for the North American building and construction, automotive, and specialty end-use markets; surface protection films catering to high-tech applications in the global electronics sector; and specialized polyester films, primarily serving the Latin American flexible packaging market. In 2022, Tredegar reported sales of $939 million, with around 1,800 employees and manufacturing facilities in North America, South America, and Asia.

Oben is a significant player in the flexible packaging industry, with over 31 years of experience in producing advanced flexible films. It operates strategically in more than 17 countries and conducts sales in over 40 countries across the Americas, Europe, and Africa. Oben's portfolio encompasses a diverse range of films, including BOPP, BOPET, BOPA, BOPE, CPP, Extrusion Coated, as well as Thermoformed Products.

 

Source:businesswire.com

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