Brazil-based nonwovens producers Fitesa has entered into a sale and purchase agreement to acquire Tredegar Corporation’s Personal Care Films business, the company has announced. The personal care iilm business has approximately 400 employees worldwide and includes manufacturing sites located in Terre Haute, IN, Kerkrade, The Netherlands; Rétság, Hungary; Diadema, Brazil and Pune, India.
The acquisition strengthens Fitesa’s films, elastics and laminates business. This business also includes the Pantex business, which was acquired in 2017 and includes manufacturing sites in Italy and the UAE.
“We are happy to announce this investment which reinforces our commitment to innovation and growth. We are continuously looking for opportunities to improve the value we create for our customers, employees, communities and shareholders. Fitesa is a strategic player that focuses on investments with a view to hold them for the long term. We believe this new acquisition, which was accomplished amidst a global crisis, is yet another demonstration of that,” says Silverio Baranzano, Fitesa’s CEO.
According to Tredegar, 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 USD 133 million and negative USD 1.7 million, respectively. However, net sales and EBITDA from ongoing operations for the Pottsville Packaging business to be retained by Tredegar were USD23 million and positive USD7 million, respectively. Tredegar also estimates that approximately USD3 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 USD70 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.