Pacman-CCL has been a licence holder of CCL Label since 2009. The remaining 50% interest in the venture will continue to be held by Ali Saeed Juma Albwardy, who, through his holding entity Albwardy Investment, has overseen the growth of the company for more than two decades.
CCL Industries will pay US$18.5m in cash to acquire its 50% interest in the venture. Pacman-CCL generated sales of $25.8m in the year ending 31 December 2010, with net after tax earnings of approximately $4.6m.
Closing of this transaction is expected to occur this summer after certain administrative procedures are completed. The venture is expected to have a small net cash position on closing. The Agreement also binds CCL and Albwardy to complete an investment in a new facility currently under construction in Jeddah, Saudi Arabia in 2011, with an estimated total cost of $4.0m to be funded by a combination of debt and additional equity in the new operation shared equally by the parties.
CCL expects its own equity contribution to be funded by dividends from the venture in its first year. The partners have also agreed in principle to a prospective future greenfield investment by Pacman-CCL in India.
Source: CCL Industries Inc
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