Orora (ASX:ORA) has announced the successful completion of the sale of its North American packaging solutions business (OPS) to Veritiv Corporation, saying the net proceeds will be used initially to repay debt facilities and invest in an organic Cans capacity expansion in Rocklea, Queensland.

Veritiv Corporation is an investee company of Clayton, Dubilier & Rice and the enterprise value of the transaction was $1.775 billion, with net proceeds after tax and costs of sale amounting to approximately $1.7 billion.  

Orora will also commence returning proceeds from the transaction to shareholders in the form of an on-market share buy-back. An initial commitment of up to 10 per cent of the shares on issue (approximately $320 million) will commence after 24 December.

Commenting on the completion of the sale, Orora managing director and CEO Brian Lowe said, “Today marks a significant milestone for Orora – completing the sale of OPS is a critical step forward in our strategy to become a specialised packaging provider for the beverage industry, focusing on our core glass and cans packaging businesses.

“OPS transitions to Veritiv in a strong position, having transformed and grown whilst part of the Orora Group.

“The transaction leaves Orora with a strong balance sheet, with an initial focus on the repayment of debt facilities.

“Capital management initiatives will include a share buyback as announced on 10 December and investment in strategically aligned projects that will grow the business and deliver value for our shareholders.”