CCL Industries is to acquire packaging business Innovia Group for CAD 1.13 billion (€810 million).
Innovia is a specialist manufacturer of BOPP films and polymer banknote substrate with a sizeable footprint in the food and beverage industry.
The transaction, CCL Industries said, follows a period for Innovia in which it ‘substantially enhanced the capabilities and performance’ of its film business.
In April, it divested its legacy Cellophane business, as FoodBev reported at the time. Innovia said that it would deepen its focus on its BOPP films and polymer banknote businesses. It also promised to ‘continue its focus and investment on differentiated product development for its core and new markets’.
And buyer Futamura said that it would ‘enhance our product range and presence across the globe’.
Innovia has also invested in new facilities for its banknote substrate business in recent month.
CCL is the world’s largest speciality label business with a market value in excess of CAD 8 billion (€5.74 billion). It employs more than 20,000 people and operates from 156 production facilities in 35 countries. CCL has a complementary presence in the markets in which Innovia operates, it said, and capabilities that put it in a strong position to take over the operations from the Smithfield Group.
Its scope includes separate label and container businesses that, between them, make up almost four-fifths of its net sales – the majority coming from CCL Labels.
It also acquired Avery from Avery Dennison in 2013. That side of the business, which makes media for use in digital printing, contributed the remaining portion of sales in the company’s latest available full-year results, prior to the acquisition of labelling and merchandising specialist Checkpoint Systems.
Mark Robertshaw, chief executive of Innovia Group, said: “CCL will be an excellent long-term owner for the employees and customers of Innovia. CCL recognises and values Innovia’s world leading technology, R&D and differentiation in films and security and sees a high degree of complementarity with CCL’s own capabilities and markets to establish new growth opportunities for their business.”
Geoffrey T Martin, president and chief executive officer of CCL, said: “This transaction is another transformative acquisition for CCL, propelling the company to world leadership in the disruptive, fast-growing polymer banknote market while strengthening our depth in the materials science arena with proprietary BOPP films technology for the label, packaging and security sectors.
“We expect to find significant operational, customer and product innovation growth opportunities between Innovia and our end-use-facing businesses at CCL Label, CCL Design, Checkpoint and Avery. We are very pleased to welcome Innovia’s deeply experienced industry people to our company and look forward to an exciting future together.”
Martin revealed that CCL’s 2017 pro-forma annual sales are forecast to exceed $5 billion post close. The transaction, he said, would be partly financed by a $450 million, two-year loan provided by a syndicate of banks led by Bank of Montreal.
The transaction is expected to close by the end of the first quarter next year.
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