AKRON—Myers Industries Inc. is ending its operations in Brazil.
The company has completed the sale of its Brazilian subsidiaries, Myers do Brasil and Novel Plasticos, to Novel Holdings–Eireli for $1, according to a Dec. 20 news release. Novel Holdings–Eireli will also assume all liabilities and obligations of the subsidiaries, whether they occur before or after closing, the release stated.
Myers, which makes polymer products for industrial, agricultural, automotive, commercial and consumer markets, said it sold the subsidiaries after "investing a considerable amount of effort evaluating strategic alternatives for the Brazil business."
With the sale, Myers expects to record a pre-tax loss of about $35 million during 2017's fourth quarter, mostly from the writedown of assets and other costs related to the transaction, the release said. Myers also expects see a cash tax benefit of $15 million from the writeoff of the company's investment in the subsidiaries.
The company said the sale won't impact Myers' operating income going forward.
"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," president and CEO Dave Banyard said in the release. "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 companies manufacture reusable plastic shipping containers, plastic pallets crates and totes used in shipping and storage in Brazil's automotive, distribution, food, beverage, and agriculture industries. The subsidiaries had a combined revenue of about $24 million in 2016.