Sealed Air Corp (SEE.N) is in exclusive talks to sell its cleaning and chemicals systems division, Diversey Care, to private equity firm Bain Capital LLC for between $3 billion and $4 billion, people familiar with the matter said on Monday.
The deal would allow Sealed Air to focus on its higher-margin food, product, and medical packaging operations by shedding a hygiene and cleaning solutions division that it no longer sees as core to its business.
Sealed Air could announce a deal with Bain before the end of March, the people said. If negotiations were to break down, Sealed Air would revert to its previous plan to spin off Diversey, the people added.
The sources asked not to be identified because the negotiations are confidential. Sealed Air and Bain did not immediately respond to requests for comment.
Sealed Air shares jumped 1.2 percent to $45.60 in extended trading in New York on Monday, giving the company a market capitalization of close to $9 billion.
Based in Charlotte, North Carolina, Sealed Air’s portfolio includes the Cryovac food packaging brand and cushioning brand Bubble Wrap.
Diversey’s business comprises floor care machines, tools, chemicals and services for commercial clients such as hotels and hospitals. It has struggled with a strong dollar and a slowdown in some of its end-markets, falling behind Sealed Air’s food care and product care businesses in profitability.
Sealed Air acquired Diversey in 2011 from its controlling shareholders, the Johnson family and private equity firm Clayton, Dubilier & Rice LLC, in a $4.3 billion cash and stock deal.
Corporate carve-outs of unloved businesses remain popular with firms such as Bain. They attract fewer private equity firms because of their complexity, making auctions for them less competitive.
Source: Reuters.com