Pactiv Corporation is to sell all of its North American and European protective and flexible packaging businesses to an affiliate of AEA Investors, an international private equity firm, for approximately $530 million.
Pactiv’s product lines include air cushioning, air padded mailers, foam, Hexacomb kraft honeycomb, flexible packaging, and hospital supplies.
In 2004, the businesses had sales of $838 million and operating income of $60 million.
The company is, however, retaining its European moulded fibre business and Asian operations. In 2004, these had sales of $120 million and operating income of $15 million excluding restructuring and other charges.
‘The sale represents an important step in Pactiv’s strategy to grow its higher return consumer, foodservice, and food packaging businesses,’ said Richard L. Wambold, chairman and chief executive officer of Pactiv Corporation.
The transaction is expected to close in the third quarter. Proceeds of the sale will be used for acquisitions, share repurchase, and ‘other corporate purposes’, according to the company.