Avery Dennison Corporation, Pasadena, CA, USA, has announced that it has signed a definitive agreement to sell its Office and Consumer Products business ("OCP") to 3M Company for $550 million in cash. The transaction is subject to customary closing conditions and regulatory approvals.
"The sale of our Office and Consumer Products business to 3M presents the best opportunity to maximize OCP's value for Avery Dennison's shareholders, and complements 3M's global portfolio," says Dean Scarborough, Avery Dennison chairman, president and chief executive officer. "Our industry-leading Pressure-sensitive Materials and Retail Branding and Information Solutions businesses, combined with our strong balance sheet, make us well positioned for profitable growth and increased return of cash to shareholders."
Avery Dennison intends to use the proceeds from the transaction primarily to reduce debt, make additional pension contributions, and repurchase shares. This transaction will not negatively impact the company's common stock dividend.
Avery Dennison's Office and Consumer Products business is one of the world's leading suppliers of printable media and other products, with expected sales in 2011 of approximately $765 million; and expected adjusted operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) in 2011 of approximately $80 million and $95 million, respectively.
The transaction is expected to be completed in the second half of 2012.