Montagu to Buy Bulk of Rexam’s Health Care Business

LONDON - Montagu Private Equity said Monday that it had agreed to acquire the health care devices and prescription retail divisions of Rexam, the British consumer packaging company, for about $805 million in cash.

The sale of the two businesses to the European private equity firm represents the bulk of Rexam’s health care operations.

Rexam said Monday that it also is in discussions regarding the sale of its closures and containers business, the third prong of its health care operations, and would provide an update in due course.

“The sale of the healthcare business is part of our long-term strategy to maximize shareholder value,” said Graham Chipchase, Rexam’s chief executive. Following the sale, he said, “We will be a focused beverage cans business with a strong financial position. Our strategy is to balance growth and returns and we will continue to pursue selective investment opportunities in beverage cans in higher growth markets.”

The health care devices business, based in La Verpillière, France, designs a broad range of medical devices, including inhalers and insulin pumps. The business has annual sales of about $265 million and employs more than 1,700 people, Montagu said.

The prescription retail business, based in Berlin, Ohio, provides plastic vials and closures to pharmacies in the United States, which are used to deliver an exact count of pills to patients. The business has annual sales of about $165 million and employs more than 170 people, Montagu said.

“Healthcare Devices and Prescription Retail are both market leaders in attractive industries with defensive characteristics,” said Sylvain Berger-Duquene, a director at Montagu. “We have been impressed by the development of the business in recent years and look forward to working with the management team to support their future growth plans.”

The transaction is subject to approval by regulatory and competition authorities. It is expected to be completed by the middle of the year.

Rexam is the world’s largest maker of beverage cans, employing about 11,000 people in 24 countries. The company reported sales of 1.97 billion pounds, or about $3.24 billion, in the first six months of 2013.

The company said it plans to return about £450 million to shareholders following the sale.

Montagu has prior experience in the health care sector, including investments in Sebia and BSN Medical. Cinven, a European private equity firm, purchased Sebia for 800 million euros, or about $1.08 billion, in 2010.
Montagu has €3.3 billion in assets under management.

Morgan Stanley and Weil, Gotshal & Manges advised Montagu on the transaction.