Pactiv Evergreen Sells Facilities to Suzano S.A.

By Tamara Parker • Saturday, July 13 06:01 • Permanent Link

Pactiv Evergreen Inc. (NASDAQ: PTVE) has announced the sale of its Pine Bluff, Arkansas, paper mill and Waynesville, North Carolina, extrusion facility to Suzano S.A. for $110 million in cash. The transaction is subject to customary adjustments for closing amounts such as working capital, and Suzano has agreed to offer employment to current employees at both facilities.

Pine Bluff produces liquid packaging board and cupstock used in the production of fresh beverage cartons, paper cups, and other fiber-based food and beverage packaging. Waynesville provides additional extrusion capacity for the board produced at Pine Bluff. As part of the agreement, Pactiv Evergreen and Suzano have agreed to enter into a long-term supply arrangement, wherein Suzano will supply liquid packaging board to Pactiv Evergreen's converting business.

Michael King, President and CEO of Pactiv Evergreen, stated that the sale of Pine Bluff and Waynesville concludes the strategic alternatives review process and is consistent with the company's focus on value creation. He expects the transaction to reduce the capital intensity of the business, improve the cash flow profile, and strengthen the balance sheet.

The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions, including foreign antitrust approval. Pactiv Evergreen anticipates recording a non-cash impairment charge of approximately $320 million to $340 million in the third quarter of 2024 based on the estimated cash proceeds from the transaction.

UBS Investment Bank is serving as the financial advisor to Pactiv Evergreen, and Debevoise & Plimpton LLP is serving as legal advisor.

Pactiv Evergreen Inc. is a leading manufacturer and distributor of fresh foodservice and food merchandising products as well as fresh beverage cartons in North America. The company's products, many of which are made with recycled, recyclable, or renewable materials, are sold to a diverse mix of customers, including restaurants, foodservice distributors, retailers, food and beverage producers, packers, and processors. Following these announcements, the company's shares moved 1.1%, and are now trading at a price of $11.87. If you want to know more, read the company's complete 8-K report here.

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