Myers Industries has completed the sale of its Brazilian operating subsidiaries, consisting of Myers do Brasil and Novel Plasticos, to Novel Holdings – Eireli in consideration for one U.S. dollar and the assumption of all liabilities and obligations of the subsidiaries, whether arising prior to or after the closing of the transaction. Myers said this transaction has occurred after investing a considerable amount of effort evaluating strategic alternatives for the Brazil business.
In connection with the transaction, Myers Industries expects to record a pre-tax loss of approximately $35 million during the fourth quarter of 2017, primarily related to the write-down of assets and other transaction-related costs. The company also expects to realize a cash tax benefit of approximately $15 million as a result of the write-off of the company’s investment in Brazil. No assets or liabilities associated with the Brazilian entities will be retained by Myers Industries, and the result of the divestiture is not expected to have a material impact on the company’s future operating income performance.
President and CEO Dave Banyard commented, “We are pleased to have reached this agreement, as this strategic transaction will allow us to better focus energy and resources on targeted niche markets where we see opportunities for stronger growth and value creation for the company. Our exit from Brazil should improve our future cash flow generation, and we are also pleased that the transaction will provide additional value in the form of a meaningful tax benefit.”
The Brazilian operations design and manufacture reusable plastic shipping containers, plastic pallets, crates and totes used for closed-loop shipping and storage in Brazil’s automotive, distribution, food, beverage and agriculture industries. The combined Brazilian entities had revenue of approximately $24 million in 2016.