FIL International, the subsidiary of FTSE 250-listed fibre and foam products provider Filtrona has signed an agreement for the acquisition of Contego Healthcare from Maximus Holding II S. R.L. and Storey Evans & Company.
The transaction values Contego at approximately £160m on a cash free, debt free basis.
The consideration, which is subject to customary adjustments for net debt and working capital and which will be payable on completion of the transaction, will be funded in part by a placing by way of an accelerated book-build of up to 21,142,613m new ordinary shares, representing 9.99% of Filtrona's current issued share capital excluding treasury shares.
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Filtrona said that the balance will be funded from existing debt facilities.
Completion is conditional upon, among other things, clearance from the German competition authorities, which is anticipated to be satisfied by mid-April 2013, the group added.
Contego is a pan-European specialist business, which provides a range of print, packaging and support services to the pharmaceutical and healthcare markets from operational sites across Europe. Its product range includes folding cartons, leaflets, self-adhesive labels and printed foils used in blister packs.
In 2012 on a consolidated basis, Contego generated revenue of £102.7m, earnings before interest, taxation, depreciation and amortisation (EBITDA) of £17.9m and earnings before interest and taxation (EBIT) of £13.9m. As of December 31st, Contego had gross assets of £78.6m.
Commenting on the acquisition, Colin Day, Chief Executive Officer of Filtrona, said: "The acquisition of Contego is a compelling strategic and complementary fit for Filtrona, as the company increasingly looks to leverage the capabilities and skills which it already has across its operating divisions in attractive growth end-markets.
He added: "With a blue-chip customer base, and a proven track record of profitable growth and innovation, Contego step changes Filtrona's position in the pharmaceutical and healthcare markets for our packaging solutions activities. In addition, through leveraging our global commercial and operational resources, there is a real opportunity to geographically expand not only our combined packaging solutions, but also our other essential components to these end-markets."
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