LONDON: Mondi plc has entered into an agreement to sell its Personal Care Components business (PCC) to Nitto Denko Corporation (Nitto).
The deal is based on an enterprise value of €615 million, which is also the approximate cash consideration payable to Mondi at completion.
Personal Care Components business (PCC), part of the Group’s Engineered Materials business unit, manufactures a range of components for personal and home care products needed in everyday life such as diapers, feminine care, adult incontinence and wipes. For the financial year to 31 December 2020, PCC generated underlying EBITDA of €42 million.
Mondi’s strategic focus to grow in packaging and the limited overlap of PCC with the rest of its business, has led Mondi to conclude that the next phase of PCC’s development will be better undertaken outside of the Group.
Nitto Denko is a leading global manufacturer of high functional materials for electronics, mobilities and human life applications following its ‘Global Niche Top Strategy’, headquartered in Japan and listed on the Tokyo Stock Exchange.
Nitto’s acquisition of PCC is aligned with its stated mid-term management plan ‘Nitto Beyond 2023’, targeting growth in the field of human life.
Following the planned completion of the Transaction, the remaining portion of Engineered Materials, namely Functional Papers and Films, will be merged into the Flexible Packaging business unit.
This will strengthen integration along the kraft paper value chain and foster innovation to continue developing functional papers with the necessary barriers to meet increasing customer demand for sustainable packaging.
Commenting on the Transaction, Andrew King, CEO of Mondi, said: “We are pleased to have agreed the sale of PCC to Nitto, knowing they will be great owners of the business.
By simplifying our portfolio, the Transaction will enable us to focus on our core packaging and paper businesses and enhance our ability to pursue our strategic priority to grow in sustainable packaging. We remain excited by our opportunity to further serve our customers with innovative solutions that are sustainable by design.”
The Transaction is subject to competition clearance and other customary closing conditions, with completion expected in the second half of 2022. The proceeds received from the Transaction will be used for general corporate purposes in line with the Group’s capital allocation policy.