SSL International Sell Surgical Gloves Business

SSL International (“SSL”) has exchanged conditional contracts with Regent Medical Limited and other related companies (“Regent Medical”) which are principally owned by funds advised by Apax Partners, who are backing an MBO team, for the disposal of the Regent Infection Control business (“Regent”) comprising Biogel surgical gloves and Hibi antiseptics.

The transaction remains conditional, inter alia, upon the approval of SSL’s shareholders, the relevant regulatory authorities in Malaysia and competition authorities in the US. Completion of the transaction is expected on 26th June.

The transaction values the Regent business at £173 million of which approximately £163 million will be paid in cash or cash equivalents and approximately £10 million in debt assumed by Regent Medical. The net cash proceeds after the payment of tax, specific transaction expenses and other related costs and licence fees will be used to reduce group borrowings.

Unaudited sales of Regent in the year to 31st March 2004 were approximately £120 million, which generated a pre-exceptional operating profit of £28 million. Profit before tax and exceptional items, but after allocating interest was approximately £24 million.

The unaudited net book value of the assets being sold to Regent Medical as at 31st March 2004 is approximately £80 million, which includes the surgical glove manufacturing and packing facilities in Malaysia. 2,081 employees will transfer to Regent Medical on completion of the transaction, of which approximately 1,900 are based in Malaysia. After taking account of net assets transferred and other provisions, the transaction will generate a pre-tax profit in the region of £50 million.

Transitional service arrangements have been agreed such that SSL will provide services such as warehousing, carriage, invoicing and cash collection for a period of up to ten months following completion of the transaction. In addition, SSL will continue to contract manufacture Hibi for Regent Medical for a minimum period of 2 years.

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