Pacific Brands Ltd
(ASX:PBG) has penned a deal to sell its Dunlop Foams and Sleepmaker businesses to Sleepyhead for around $55 million.
Under the agreement Pacific Brands will acquire Sleepyhead's Australian carpet underlay business, called Wonderlay, for a nominal amount.
The lifestyle brands retailer says the divestment is in line with its transformation program announced last year, with neither Dunlop Foams or Sleepmaker part of its long-term strategic focus.
Alternatively Pacific Brands says the acquisition of Wonderlay will be a good addition to its already operating carpet underlay business, Dunlop Flooring.
The sale of the two businesses is expected to result in a reduction in Pacific Brands' sales revenue and earnings before interest tax and amortisation of around $160 million and $11 million respectively on a full-year basis, and, Pacific Brands will incur a one-off non-cash loss on the sale of around $35 million.
The deal is expected to be finalised in the next three months and is still subject to approval from the Australian Competition and Consumer Commission.
Pacific Brands rebounded from a loss of $234.29 million last year to post a profit of $53.195 million in fiscal 2010.
