Ontex completes divestment of Mexican business for €265 million

The transaction includes Ontex’s manufacturing facility in Puebla, Mexico, its branded business in Mexico as well as related exports to certain regional markets. The business employs around 1,000 blue-collar employees and 350 white-collar employees. Ontex’s manufacturing facility in Tijuana, Mexico, will remain with Ontex and will form an integral part of Ontex’s North American operations and supply chain footprint, the company said in a press release.

“With this transaction, we make a significant step in the implementation of our strategy and in strengthening our balance sheet. While there is more to accomplish, reaching this milestone allows us to focus further on our partner brands and healthcare business in the core markets of Europe and North America, where we have significant growth drivers for the future,” Gustavo Calvo Paz, CEO of Ontex, said.

Aggregate net cash proceeds received at closing, after the impact of taxes, transaction expenses and balance sheet adjustments are approximately €225 million. This amount is subject to customary post-closing adjustments. The proceeds will be used to repay Ontex’s €220 million term loan. In addition, the parties have agreed to a deferred payment with a value of approximately €40 million, payable to Ontex over a maximum of five years.

Fibre2Fashion News Desk (RR)