LONDON, UK: Essentra plc announced the disposal of ESNT Packaging & Securing Solutions Limited and Essentra Packaging US Inc and their respective subsidiary companies to Mayr-Melnhof Group (MM) for a cash consideration of £312 million, a statement noted.

Mayr-Melnhof Group (MM) is the a leading producer of carton board and folding cartons based in Austria.

The transaction is subject to various conditions which are set out further below including a shareholder vote for Essentra. The Class 1 circular and notice of General Meeting will be published in due course with the transaction set to complete in Q4 2022.

The Board intends to use the proceeds to further strengthen Essentra’s balance sheet, and make a small contribution to Essentra’s defined benefit pension schemes.

The strategic review of Essentra’s Filters division is progressing in line with expectations and, following the conclusion of this review, the Board will determine the best use of cash on the Company’s balance sheet, carefully taking into consideration the imperative of maximising shareholder value after allowing for sufficient flexibility of the Components business to pursue value creating opportunities.

Commenting on the announcement, Paul Forman, Chief Executive said: “The sale of Packaging marks a significant step on our journey to become a pure play Components business. A substantial amount of work has gone into improving the Packaging division over the last few years and I would like to thank all colleagues for their commitment and hard work whilst part of Essentra. I wish them all the best for the future. I am sure that the business will continue to make excellent progress under the ownership of Mayr-Melnhof.

Essentra has a bright future as a global leading manufacturer and distributor of components with a clear strategy and significant opportunities to accelerate growth and expand market share. This transaction will enhance Essentra’s balance sheet strength and enable the Group to participate in further investment activity.”