Speciality filter manufacturer Filtrona was demerged from its parent company Bunzl today.

At a shareholders meeting held Thursday, shareholders approved the Filtrona demerger, the consolidation of the company's share capital and the replacement of the directors' authority in relation to the purchase by Bunzl of its own shares. The Filtrona demerger values the spun-out unit at about £ 500 million and will be carried out through a pro-rata distribution of Filtrona shares to Bunzl’s existing shareholder base.
As a result of the demerger, Bunzl is expected to drop out of the FTSE 100 and join Filtrona in the FTSE 250 index. Filtrona reported sales of £ 477.5 million last year for an operating profit before goodwill amortisation of £ 54.2 million. Bunzl’s group sales last year were £ 2.9 billion for a pre-tax profit of £ 200.9 million.
Mark Harper, who will remain as Filtrona’s chief executive when it lists on the Stock Exchange next month, said that the business had substantial organic growth potential and would continue its strategy of acquiring niche operators.
Filtrona will have about £ 120 million in debt and a £ 215 million banking facility.
Mr Harper said: "We do have growth potential left. We look forward with a degree of confidence and believe that the trading record we have is something that should continue.”
The Filtrona demerger will be Anthony Habgood’s final move before retiring as Bunzl’s executive chairman. Mr Habgood pushed the deal to generate greater value for the unit, which sits uncomfortably among Bunzl’s core outsourcing and distribution business. (pi)