Mondi plc (‘Mondi’ or the ‘Group’) is pleased to announce that it has entered into an agreement to sell its Personal Care Components business (‘PCC’) to Nitto Denko Corporation (‘Nitto’) for an enterprise value of €615 million, which is also the approximate cash consideration payable to Mondi at completion (the ‘Transaction’).
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.
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.
Nitto 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.
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.
Mondi Group Chief Executive Officer, Andrew King
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.
The Transaction constitutes a class 2 transaction for the purposes of the UK Financial Conduct Authority’s Listing Rules. For the year ended 31 December 2020, PCC generated underlying profit before tax (before special items) of €16 million and a loss before tax (after special items) of €19 million. The gross assets of PCC as at 30 June 2021 were €435 million.
Mondi is a global leader in packaging and paper, contributing to a better world by making innovative packaging and paper solutions that are sustainable by design. Our business is integrated across the value chain – from managing forests and producing pulp, paper and plastic films, to developing and manufacturing effective industrial and consumer packaging solutions. Sustainability is at the centre of our strategy and intrinsic in the way we do business. We lead the industry with our customer-centric approach, EcoSolutions, where we ask the right questions to find the most sustainable solution. In 2020, Mondi had revenues of €6.66 billion and underlying EBITDA of €1.35 billion.
Mondi has a premium listing on the London Stock Exchange (MNDI), and a secondary listing on the JSE Limited (MNP). Mondi is a FTSE 100 constituent and has been included in the FTSE4Good Index Series since 2008 and the FTSE/JSE Responsible Investment Index Series since 2007.
Sponsor in South Africa: Merrill Lynch South Africa Proprietary Limited t/a BofA Securities.