Doncaster-based manufacturer Polypipe Group has entered into exclusive negotiations to sell Polypipe France Holding, its French operations, to Ryb, a France-based manufacturer and distributor of plastics in Europe.
The cash consideration payable by Ryb will be €16.5m on a debt free, cash-free and normalised working capital basis.
For the year ended 31 December 2017, Polypipe France generated revenue of approximately €67.6m and underlying operating profit of approximately €1.5m.
Martin Payne, chief executive, said: “Polypipe France has historically operated in a competitive area of the French construction market and will be better able to grow under new ownership. In line with its strategy, Polypipe will continue to focus its resources fully on delivering profitable growth, both organically and by acquisition, through legacy material substitution, legislative tailwinds in water management and carbon reduction, and geographic reach.”
Completion of the transaction, which remains subject to an employee consultation process, is expected in the first half of 2018. Proceeds from the disposal, receivable in cash at completion, will be used to reinvest in the growth of the Company.
Further to the update on trading announced in November 2017, the Group’s trading performance for the full year was in line with management expectations.