Multi-Color Corporation announced Monday the signing of a letter of intent Collotype International Holdings Pty. Ltd., headquartered in Adelaide, South Australia, Australia. Collotype is a pressure sensitive wine and spirits label manufacturer with a strong market position in Australia, the United States and South Africa, and a growing provider of labels in the fast moving consumer goods marketplace.
According to Multi-Color President and CEO Frank Gerace, “This transaction will be a large step towards our strategy of building a global platform in the consumer labels business, capable of serving premium brands by leveraging complimentary technologies, innovation, talent and customer relationships. I am especially pleased to welcome Nigel Vinecombe and his management team to Multi-Color Corporation upon closing of the transaction and look forward to growing our business together.”
Collotype Group Managing Director Nigel Vinecombe adds, “Collotype and Multi-Color are natural partners — both businesses are recognized for leadership in quality, innovation, technology and services to our customers. The Collotype management team is excited about contributing to the growth of the combined group.”
Upon completion of the transaction, Nigel Vinecombe will become president of Multi-Color’s international business unit. Don Kneir will continue as president of Multi-Color’s North American Business Unit.
The acquisition, to be paid for with a combination of cash and stock, is expected to be accretive to earnings immediately upon completion. Financial terms will be disclosed upon the completion of the transaction, expected within 60 days. The transaction is subject to final negotiation and execution of a definitive share purchase agreement and satisfaction of customary closing conditions. Multi-Color expects to draw down its revolving credit facility to finance the transaction.
Multi-Color also announced plans to expand its manufacturing operations with the purchase of a 247,000 square foot building in Batavia, OH, USA. The company says it is investing in the facility to create a platform for the future in order to take full advantage of the long-term growth opportunities in the decorative label industry.
Multi-Color plans to consolidate its current Batavia, OH and Troy, OH operations into the new Batavia facility over the next several months. The company also plans to transfer Batavia’s existing 95 associates and have discussions with Troy’s 25 associates regarding employment at the new facility. In addition, Multi-Color expects to create 83 additional jobs over the next three years as a part of its strategic growth initiative. By consolidating these operations into this new supercenter, Multi-Color says it will improve manufacturing efficiencies while expanding needed capacity for long-term growth.