Rexam looks to sell its healthcare operation

By Rhoda Miel
News Editor

Published: June 25, 2013 12:37 pm ET
Updated: June 25, 2013 2:33 pm ET

Related to this story

Topics Mergers & Acquisitions, Medical, Packaging, Molds/Tooling
Companies & Associations Rexam PLC

Packaging giant Rexam plc has announced it plans to sell its healthcare operation.

The division accounted for around 10 percent of the London-based company's £4.3 billion in sales last year, and 11.5 percent of its underlying operating profits.

Once a deal had gone through Rexam would be a "focused beverage cans business", said CEO Graham Chipchase.

Last year Rexam sold its personal-care packaging division for $709 million to two separate buyers, leaving the healthcare operation as its major remaining plastics holding. Rexam's healthcare division makes delivery devices such as insulin pens, asthma inhalers and pumps as well as bottles and closures.

Rexam wants to concentrate on its beverage packaging industry, which is the bulk of its sales, Chipchase said during a June 25 telephone conference call with analysts.

"The big picture is something that we've been saying for the past six months, that at 10 percent [of overall sales] of the group, healthcare is not core," Chipchase said.

Healthcare is divided roughly into three business segments, he said — devices, prescription retail packaging and containers and closures. Its Rexam Mold Manufacturing group in Buffalo Grove, Ill., produces tools used for the company's healthcare businesses.

The healthcare group has some strong future business in the pipeline, especially in the medical devices area, but the bulk of those will not go into commercial production for two to three years.

At the same time, the market for mergers and acquisitions is starting to heat up currently, which means that the time may be right to hammer out a deal with a buyer looking for a solid investment with strong potential for growth.

"As to why are we looking at selling it now, there are a couple of things," Chipchase said. "One is that the business team there at healthcare has stabilized the business. The second thing is that we always said that we would consider good offers for the business. We haven't had any offers but we've had a lot of interest at the moment, so now is the time to start thinking about it."

Rexam will only sell if it receives an attractive offer, he said.

Plastics & Rubber Weekly contributed to this report.


Comments

Rexam looks to sell its healthcare operation

By Rhoda Miel
News Editor

Published: June 25, 2013 12:37 pm ET
Updated: June 25, 2013 2:33 pm ET

Post Your Comments


Back to story


More stories

Image

Ply Gem continues acquisition streak, buying Simonton for $130 million

August 20, 2014 2:33 pm ET

Building materials manufacturer Ply Gem Holdings Inc. will acquire Simonton Windows from Fortune Brands Home & Security in a $130 million deal that...    More

Image

Has the current M&A cycle peaked?

August 20, 2014 11:55 am ET

Plastics M&A veteran Thomas Blaige has called the peak of the current investment cycle.    More

Image

Ohio molder sold to private equity firm

August 19, 2014 5:23 pm ET

Private equity firm TVV Capital of Nashville has acquired injection molder Design Molded Plastics Inc. for an undisclosed price.    More

Image

Pactiv selling building products unit to Ireland's Kingspan

August 19, 2014 3:54 pm ET

Irish building material manufacturer Kingspan Group plc is acquiring the insulation business of Lake Forest, Ill.-based Pactiv Building Products for...    More

Image

Report: Graham looking to sell Infiltrator

August 19, 2014 11:32 am ET

Private equity group Graham Partners Inc. reportedly is ready to sell septic tank maker Infiltrator Systems Inc. after holding the Old Saybrook, Conn....    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events