02.05.13
CCL Industries is buying two business units from Avery Dennison for $500 million in cash. The transaction includes Avery Dennison Corp.'s office and consumer products and its designed and engineered solutions businesses. The businesses had combined revenue of about $910 million in 2012.
Avery Dennison Chairman President and CEO Dean A. Scarborough says that the deal will allow the company to concentrate on its pressure sensitive materials and retail branding and information solutions businesses. Avery Dennison had planned to sell its office supply business to Post-it Note maker 3M Co. last year for $550 million, but the deal was called off because of antitrust concerns.
“This sale is consistent with our goal of maximizing the value of our businesses for Avery Dennison’s shareholders, and focusing on our industry-leading Pressure-sensitive Materials and Retail Branding and Information Solutions businesses,” says Scarborough, adding, “CCL is one of our largest customers, and we have a long-standing relationship with them. We are pleased that they will become the steward of the Avery brand for office products and augment their specialty converting portfolio through this transaction.”
Avery Dennison intends to use the expected net sale proceeds of approximately $400 million to repurchase shares and make an additional pension contribution.
Avery Dennison’s Office and Consumer Products business is one of the world’s leading suppliers of printable media and other products, with 2012 sales of approximately $730 million and adjusted operating income of approximately $86 million.
Avery Dennison Designed and Engineered Solutions manufactures custom pressure sensitive labels and coated films for durable goods, electronics and specialty packaging. The business unit’s 2012 sales were approximately $180 million, with adjusted operating income of approximately $19 million.
CCL Industries President and CEO Geoffrey Martin said that the buyout is expected to add to its earnings per share starting in 2014.
“This acquisition has the potential to transform our company at many levels," Martin says. "We are acquiring the Avery brand as part of the transaction to build on the franchise established for many decades for labels and other printable media that consumers and businesses use in digital computer printers around the world. In addition, we are significantly expanding our CCL Label market sectors with our entry into the North American durable goods market. This acquisition is the largest in CCL’s history and takes the company’s pro-forma annual revenue above $2 billion for the first time. We know both businesses well and have admired the people and the products for many years. We expect the transaction to be accretive on an earnings per share basis in 2014 and beyond as the valuation falls well within the established financial parameters for CCL’s acquisitions in the label industry over the last decade.”
The deal is expected to close by the middle of the year.
Avery Dennison Chairman President and CEO Dean A. Scarborough says that the deal will allow the company to concentrate on its pressure sensitive materials and retail branding and information solutions businesses. Avery Dennison had planned to sell its office supply business to Post-it Note maker 3M Co. last year for $550 million, but the deal was called off because of antitrust concerns.
“This sale is consistent with our goal of maximizing the value of our businesses for Avery Dennison’s shareholders, and focusing on our industry-leading Pressure-sensitive Materials and Retail Branding and Information Solutions businesses,” says Scarborough, adding, “CCL is one of our largest customers, and we have a long-standing relationship with them. We are pleased that they will become the steward of the Avery brand for office products and augment their specialty converting portfolio through this transaction.”
Avery Dennison intends to use the expected net sale proceeds of approximately $400 million to repurchase shares and make an additional pension contribution.
Avery Dennison’s Office and Consumer Products business is one of the world’s leading suppliers of printable media and other products, with 2012 sales of approximately $730 million and adjusted operating income of approximately $86 million.
Avery Dennison Designed and Engineered Solutions manufactures custom pressure sensitive labels and coated films for durable goods, electronics and specialty packaging. The business unit’s 2012 sales were approximately $180 million, with adjusted operating income of approximately $19 million.
CCL Industries President and CEO Geoffrey Martin said that the buyout is expected to add to its earnings per share starting in 2014.
“This acquisition has the potential to transform our company at many levels," Martin says. "We are acquiring the Avery brand as part of the transaction to build on the franchise established for many decades for labels and other printable media that consumers and businesses use in digital computer printers around the world. In addition, we are significantly expanding our CCL Label market sectors with our entry into the North American durable goods market. This acquisition is the largest in CCL’s history and takes the company’s pro-forma annual revenue above $2 billion for the first time. We know both businesses well and have admired the people and the products for many years. We expect the transaction to be accretive on an earnings per share basis in 2014 and beyond as the valuation falls well within the established financial parameters for CCL’s acquisitions in the label industry over the last decade.”
The deal is expected to close by the middle of the year.