Global plastic films and aluminium extrusions manufacturer Tredegar has agreed to sell its flexible packaging films business, Terphane, to Oben Group affiliates.

Terphane’s sale has been finalised for a net debt-free base consideration of $116m.

Headquartered in Brazil’s São Paulo, Terphane exports to nearly 29 countries, with its manufacturing facilities located in Cabo de Santo Agostinho, Brazil and Bloomfield, New York.

Currently, Terphane employs around 500 people.

Tredegar anticipates realising $85m in after-tax cash proceeds from the completion of this transaction, after subtracting expected withholding taxes by Brazil, escrow funds and US capital gains taxes.

However, Tredegar said that this estimated actual after-tax proceeds “may differ” at the conclusion of deal.

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This difference can be due to possible changes in deductions during “potentially lengthy interim period”, expected to range between 8 and 14 months, before the closing date.

Tredegar president and CEO John Steitz said: “We believe that purchase by Oben of Terphane will enhance scale and growth opportunities in keenly competitive global flexible packaging market.”

Completion of this deal is now subject to the fulfilment of some customary conditions, including clearance from competition authorities in Brazil and Colombia.

Tredegar’s financial advisor and the US corporate counsel for this transaction were JP Morgan Securities and Hunton Andrews Kurth, respectively.

Oben CEO Gonzalo Belaunde said: “Completion of this transaction will strengthen Oben’s position as a global player in highly competitive flexible films industry, by expanding production capacity of biaxially oriented polyethylene terephthalate (BOPET) films and providing a great platform to expand production capacity for other films, especially biaxially oriented polypropylene (BOPP), in the US and Brazil.

“We expect our combined operations, expertise and synergies created by transaction, to enhance our service to clients. We look forward to the employees of Terphane joining Oben team.”

Oben specialises in manufacturing flexible films, such as biaxially oriented polyamide (BOPA), BOPP, BOPET and BOPE, along with extrusion coated and thermoformed products.