Milton Keynes-headquartered Filtrona will buy 100% of the share capital of Contego Healthcare, through its subsidiary FIL International Limited, for £160m on a cash free, debt free basis, once the deal gets clearance from German competition authorities.
The move, part of a strategy by Filtrona to grow organically through a series of smart acquisitions, is aimed at getting more of a toehold in the growing pharmaceutical and healthcare sectors.
Contego Healthcare, which trades under the name Contego Packaging, manufactures products ranging from printed foils used in blister packs to folding cartons, the majority of which come out of its facility in Giltbrook, Nottinghamshire.
Such products complement Filtrona’s existing work in porous technology and coating and security products, particularly in the light of growing concerns about counterfeit drugs.
Contego Healthcare, which had a turnover of £103m during 2012, operates in 10 countries across Europe while Filtrona has a global reach in the majority of continents.
Filtrona operations director Joanna Speed called the move "a game changer for our coating and security product division".
The sale of Contego Healthcare marks the completion of Platinum Equity's exit from the two former Nampak businesses it acquired in December 2010, following its sale of Contego Cartons (formerly Nampak Cartons) at the start of this year.
Nicholas Mockett of Moorgate Capital, which advised on both sales, said: "Contego Healthcare continues to grow in the highly important healthcare packaging supply chain. Its combination of complementary products, providing single sourcing, and the support services around those have differentiated its multi-national footprint.
"With the ongoing evolution of regulation in the pharma segment and the focus on tamper evidence and brand integrity, we see a natural fit with Filtrona’s existing capabilities."
Speed predicted Contego's product and customer portfolio would grow Filtrona’s total healthcare and pharmaceutical revenue from a current level of 3% of its £663m turnover to an estimated 15%.
"The sector is forecast to grow around 6% globally up to 2015," she said, adding that growing and ageing populations and an increase in people buying drugs and healthcare products online were among the trends.
She declined to comment on plans for Contego ahead of completion but said it had "quality sites with an experienced management team and long-standing customer relationships."
Filtrona will fund the acquisition by issuing just over 21m new ordinary shares, representing 10% of its issued share capital, with the balance funded from its existing debt facilities. Filtrona's shares closed up 4% at 690.5.
The companies should receive a decision on competition clearance by the middle of next month.
Last month Contego announced an investment in new equipment at its Italian operations.
