Suominen Divests Flexible Packaging Business, Focuses On Nonwovens
Finland-based Suominen Corp. has announced that it has completed the divestment of its flexible packaging business — which includes Suominen Joustopakkaukset Oy and its subsidiaries, and Suominen Polska Z.o.o. — to Lonsdale Capital Partners LLP, United Kingdom. The Flexibles business produces printed plastic film packaging for a variety of applications at its plants in Finland and Poland, and operates sales offices in Sweden and Russia.
The divestment is in line with Suominen’s strategic plans to become a nonwovens-focused company, and moving forward, the company will operate two nonwovens business areas: Convenience and Care.
The Flexibles business was valued at 20 million euros, and Suominen has retained a 19.9-percent minority share in the business by converting parts of the currently outstanding intra-group loans into equity. Remaining intra-group loans continue as a vendor loan. There also was a customary earn-out component amounting to approximately 1 million euros. A cash component of the purchase price totaling 5.7 million euros was paid to Suominen at closing.
In accordance with the IFRS 5 standard, Suominen will recognize a non-recurring loss of approximately 4.5 million euros in second quarter 2014 resulting from the divestment. Additionally, the company has revised the comparison numbers in its 2014 outlook statement to reflect the changes in its business. For 2014 as a whole, Suominen expects net sales and operating profit to increase compared with 2013 numbers.
“Divesting the Flexibles business area clarifies both our corporate structure and strategic focus,” said Nina Kopola, president and CEO, Suominen Corp. “From now on, Suominen is totally devoted to nonwovens. We will be able to concentrate even better than earlier on executing our nonwovens strategy, along with further strengthening our capability to serve our nonwovens customers and grow together with them.”
July 15, 2014