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Sealed Air sells Diversey Japan for $377m

By Joe Whitworth , 30-Oct-2012

Sealed Air has sold Diversey Japan to The Carlyle Group for ¥30bn (US$377m) to focus on higher growth markets.

The firm announced today it will sell Diversey G.K. (Diversey Japan) with equity for the investment coming from Carlyle Japan Partners II.

Diversey Japan provides cleaning, sanitation and hygiene products and solutions, to institutional customers in the Japanese market, with trailing twelve month sales as of 30 September of $321m.

The transaction is expected to be completed in Q4, subject to customary closing conditions.

Sealed Air said that Diversey Japan will be accounted for as a discontinued operation as of 30 September which is expected to impact third quarter 2012 net earnings per share by $0.03.

Strategic review

“The determination to sell Diversey Japan follows a strategic portfolio review aimed at focusing on higher growth countries in which our portfolio offers the greatest potential,” said William V. Hickey, Sealed Air’s chair of the board and chief executive officer.

“We are very committed to our strategy of growing our presence in food safety and security, facility hygiene and product protection globally. We intend to continue our close relationship with Diversey Japan as we collaborate in areas such as product development, procurement and providing quality service to customers.

“The sale of Diversey Japan allows us to continue to offer leading solutions and service levels, while accelerating debt reduction and generating value for our stockholders.”

Toshiro Misumi, executor of Diversey G.K., will be president and chief executive officer upon closing and lead the newly independent Diversey Japan.

"The newly independent Diversey Japan, in cooperation with Carlyle, will have a dedicated organization specifically oriented toward the Japanese market, making it possible for us to respond effectively to our domestic customers' needs, and also to pursue the best-suited strategies for our local business,” he said.

“Meanwhile we will continue to collaborate closely with Sealed Air and Sealed Air's Diversey business, drawing on our shared network to provide high-quality products and services to our customers.”

Sealed Air completed the takeover of Diversey, who serve brewers, beverage bottlers, dairies and food processors, for $4.3bn in October last year.

Significant growth potential

Tamotsu Adachi, managing director of The Carlyle Group and Co-head of its Japan Buyout Group, said Diversey Japan has a preeminent position in the stable cleaning and sanitation market.

“With its competitive line-up of products and solutions as well as its strong sales network, we believe the company will continue its significant growth in the future.

“Diversey Japan's competitive positioning and high growth potential, combined with its unique business model as a total solution provider, have led us to invest in its future development. We look forward to partnering with Mr. Misumi and the rest of the talented new management team and intend to provide our fullest support to Diversey Japan.

“Furthermore, we will endeavor as a private equity sponsor to provide support in terms of both business strategy and capital, so that Diversey Japan can achieve a new growth story for the future under the new management structure."

Sealed Air also announced it was rescheduling its third quarter results and conference call to 2 November due to the anticipated inclement weather associated with Hurricane Sandy.

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