Gerresheimer Shares Soar 14% on €1.5 Billion Asset Sale to Apax Funds

German pharmaceutical packaging manufacturer Gerresheimer AG has agreed to a divestment of two key plastic packaging units to private equity firm Apax Funds for a total of €1.5 billion ($1.71 billion), including debt. The company's stock surged 14% in response to the announcement, signaling strong investor approval of the strategic move.

Deal Details

The transaction includes the sale of Gerresheimer's U.S.-based Centor business and its global Primary Packaging Plastics unit. According to the company, these two divisions represent a significant portion of its plastics operations, with combined figures including:

• Revenue: Approximately €570 million in the last fiscal year.
• Workforce: Around 2,400 employees.
• Operations: 15 production facilities across nine countries, in addition to Centor's dedicated U.S. production site.

Strategic Rationale

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Gerresheimer stated that it will use the cash proceeds from the sale to optimize its capital and financing structure, with a primary goal of decreasing its leverage. The company noted that it initiated the sale process for the Centor unit in February as part of a broader effort to streamline its business and improve its financial standing.

Context and Background

The divestment follows a challenging period for the German firm. Earlier this year, Gerresheimer faced internal investigations into its accounting practices, which resulted in a delay of its financial results. These issues also led to the company's removal from Deutsche Boerse’s SDAX small-cap index and prompted Germany’s financial regulator, BaFin, to open audits of its financial statements.