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Tredegar Agrees To Sell Personal Care Films Business To Fitesa; Sees Cash Proceeds $40M-$45M

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

Benzinga · 08/25/2020 12:26

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.