Rexam solicits buyers for healthcare packaging arm in potential $1B deal

Rexam, a global beverage can maker, is making major headway with plans to sell its healthcare packaging arm in a deal that could be worth as much as $1 billion. Reuters reports that the company sent out "teasers" to prospective buyers and expects first-round bids by the end of September. The division produces a number of medical devices including injection syringes and bronchial inhalers.

Rexam, which is based in the U.K., disclosed in June that it would sell its healthcare arm so it can "focus on beverage cans and maximize shareholder value."

Four banking sources told Reuters that the company is hoping for bids from both "strategic players" in the space as well as large private equity firms. Who are the potential buyers? Speculate away. The news agency writes that a number of players might be interested, including U.S. company Berry Plastics, and private equity firms such as Cinven, BC Partners, Bain Capital, Carlyle, Permira and One Equity Partners.

A source told Reuters that the hoped-for price tag of about $1 billion stems from a multiple of 8 times the division's earnings before the company factors in interest, tax, depreciation and amortization. CEO Graham Chipchase has previously said the company was drawing healthy interest with its sale plans but expects an eventual deal won't be completed until early 2014.

Bronchial inhalers and injection syringes may not be the sexiest medical devices out there. But they represent a steady and growing business that will surely draw a buyer that smells opportunity. Previously, Rexam sold off other divisions focused on cosmetics, toiletries and household care, Reuters notes.

- read the Reuters story
- here's Rexam's initial announcement

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