UK-headquartered packaging giant Rexam PLC is selling a bulk of its Healthcare business, comprising Pharmaceutical Devices and Prescription Retail Packaging divisions, for US$805 million in cash to Montagu Private Equity. The healthcare business makes medical packaging and drug delivery devices such as bronchial inhalers and injection syringes.

The transaction is subject to consultation with various European works councils and is expected to complete around the middle of this year.

The Healthcare business has three divisions: Pharmaceutical Devices, Prescription Retail Packaging and Closures & Containers. Rexam is in discussions regarding the sale of Closures & Containers and says it will provide an update in due course.

In 2012, Pharmaceutical Devices and Prescription Retail Packaging employed some 1,500 people and had sales of £250 million and underlying operating profit of £43 million before central overheads. It accounts for 85% of total Healthcare EBITDA.

Following completion of the sale, Rexam plans to return to shareholders around £450 million, which, it is anticipated, will be effected by way of a redeemable B share scheme together with a share consolidation.

Graham Chipchase, Rexam's Chief Executive said: "The sale of the Healthcare business is part of our long term strategy to maximise shareholder value. The Pharmaceutical Devices and Prescription Retail Packaging divisions represent the majority of the value of our Healthcare business. Following the sale of Healthcare, we will be a focused beverage cans business with a strong financial position. Our strategy is to balance growth and returns and we will continue to pursue selective investment opportunities in beverage cans in higher growth markets.”