Essentra PLC (LON:ESNT) has sold its Speciality Tapes business in a US$77mln sale to private equity group OpenGate Capital.
The FTSE 250-listed firm said the funds from the all-cash deal would be used to further strengthen its balance sheet.
READ: Essentra makes another disposal from specialist components division
For the year ended 31 December 2018, Speciality Tapes contributed a pro forma operating profit of £7.8mln and ended the year with gross assets of £54.6mln.
Paul Forman, Essentra’s chief executive, said the sale represented another “significant” move by the firm to simplify its portfolio, adding that OpenGate had the investment resources to build on Speciality Tapes’ capabilities and diversify its end-market exposure.
“The transaction both represents good value for Essentra's shareholders and provides the business with a strong platform for future successful growth”, Forman added.
The sale of Speciality Tapes follows the disposal of the group’s Extrusion business, which focused on plastic extrusion where hot plastic is formed into items such as tyres, pipes, sheeting and window frames, to Danish firm Inter Primo last week for around £14.4mln.
In a note to clients, analysts at Essentra’s ‘house’ broker Peel Hunt said they expected the proceeds of the disposal to be reinvested into the business and infill acquisitions in the company’s core operations.
In early trading on Thursday, Essentra shares were up 1% at 420.4p.