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Subsequent Events (Notes)
9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events [Text Block]
On September 1, 2023, the Company entered into an agreement to sell Terphane, headquartered in Brazil, to Oben for net cash-free and debt-free base consideration of $116 million.
On November 1, 2024, Tredegar completed the sale of Terphane to Oben. At closing, Tredegar received $60 million in cash, which is net of Terphane debt assumed by Oben of $20 million and Terphane cash retained by Oben of $2 million. Accordingly, on a cash-free and debt-free basis, the enterprise value of the Terphane transaction at closing for Tredegar was $78 million. Tredegar anticipates receiving an additional $7 million in cash following the release of certain escrow funds within 120 days of closing. The cash proceeds received by Tredegar at closing are after deducting projected Brazil withholding taxes, net working capital adjustments, escrow funds, U.S. capital gains taxes and transaction expenses. The total estimated proceeds from the sale of Terphane are required to be used to pay down the outstanding ABL Facility debt.
An estimated pre-tax loss on the sale of $72.5 million ($65.5 million after-tax) is expected to be recognized in the fourth quarter of 2024. The estimated net loss on sale includes $100 million of estimated cumulative translation adjustment losses and gains on derivative financial instruments reclassified from other comprehensive income (loss). Expected amounts are based on Terphane’s estimated closing balance sheet, which are subject to change.
As of and for the nine months ended September 30, 2024, the Flexible Packaging Films business had net assets of approximately $36 million and EBITDA from ongoing operations of $8.9 million. See Note 9 where Flexible Packing Films is presented as a reportable segment. As a result of the completion of the sale, the Company will classify and report Terphane as discontinued operations in the fourth quarter of 2024.