CCL Industries Inc. has announced an agreement to acquire the sleeve label business of Illinois Tool Works Inc. (ITW) on a debt free basis for approximately C$105 million in cash.
ITW produces shrink-film sleeve labels for the European and North American markets in two factories at its Decorative Sleeves division in the United Kingdom. In addition, the ITW Auto-Sleeve division has facilities in Austria and Brazil that produce primarily stretch-film sleeve labels for markets in Europe and the Americas, respectively. The Brazilian operations include a sales, service and distribution arm that handles the North American market from Twinsburg, OH, USA. Together, these businesses had sales of approximately C$87 million in 2006.
The parties expect the transaction to close at the end of January 2007 following receipt of regulatory approvals.
Geoffrey Martin, president and COO of CCL Industries, says, “Shrink and stretch sleeve labels offer a flexible full body form of decoration which is particularly effective for the highly shaped containers used in the premium food and beverage and the home and personal care segments of the market. Our two businesses target many common customers in the consumer products market. The combination of CCL Label’s sleeve product lines with those of ITW will make us one of the global leaders in a fast growing segment of the label industry.”
CCL manufactures pressure sensitive, shrink sleeve and in-mold labels, aluminum containers and plastic tubes for leading global companies in the home and personal care, healthcare and specialty food and beverage sectors. With headquarters in Toronto, Canada, the company employs more than 4,600 people and operates 45 production facilities in North America, Europe, Latin America, and Asia.