Packaging firm DS Smith has sold its plastics division to investment firm Olympus Partners for $585m (£450m).
The price is almost 10 times the division’s earnings in the last year, when pre-tax profit was £28m. It will use the money raised to reduce borrowings.
Selling the plastics business, which comprises flexible plastics, rigid plastics and foam products, “represents an important step in DS Smith’s continued progress as a leader in sustainable packaging”, a company statement said.
Group chief executive Miles Roberts added: “I am delighted to confirm that we have reached an agreement for the sale of our plastics division.
“The transaction is attractive both financially and strategically for DS Smith as, together with the acquisition of Europac, we reinforce our position as a leader in sustainable packaging with a clear focus on our fibre-based business.”
DS Smith also issued a trading update which said its activity was in line with expectations. The company continued to see good corrugated box volume growth and an especially busy Christmas period for e-commerce customers. It completed the acquisition of Europac on 22 January.