The condoms to odour eaters company SSL International has sold half its historic Marigold gloves business for £22m. The company, which is behind brands including Durex and Scholl, is disposing of the industrial gloves side of Marigold, but will keep the famous dishwashing and gardening gloves sold direct to consumers.
The French glove maker Comasec is buying the division for £15m in cash, £5m in loans and a further £2m linked to performance targets.
The tortuous sale process has dragged on for more than 18 months and SSL had to agree to take over certain liabilities and make redundancies across the group before it could tie up a deal.
The industrial gloves division has annual sales of £33m, compared with about £20m for household Marigolds, and made an operating profit of £4m last year. Comasec will take control of factories in Malaysia and Portugal, as well as 1,122 employees.
SSL, led by its chief executive Brian Buchan, will incur a £15m charge in its accounts as a result of written-off goodwill and other costs associated with the deal. Its shares fell 3p to 292p yesterday.
The disposal is the first step in a dramatic reshaping of the group, which will see it shed all its non-consumer brands, about a third of the business when measured by sales, by the end of this year.
Peter Cartwright, an analyst at Williams de Broe, said the headline figure in the Marigold sale masked additional costs of redundancies and other liabilities, which will fall to SSL.
He said: "I think this is likely to be a theme at SSL, that the disposals are going to be earnings dilutive, but they feel they have to do them to get the group into the shape they want. Hopefully, it will be a small but decently performing group, or will attract a bid." SSL received an approach from Reckitt Benckiser earlier this year, but the talks lapsed.
The giant disposal plan affects one-third of the group by sales, and tears apart the conglomerate created by the merger of Seton Scholl and London International Group in 1999. The division's brands include Hibi antisceptic scrub and Biogel surgical gloves.
Garry Watts, SSL's finance director, said he was not disappointed to have found a buyer for only half the Marigold business.
Selling both sides would have entailed finding another group with industrial and consumer distribution channels, of which there are few, he said. Comasec will now make household Marigolds for SSL.
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