CCL Industries Inc. (TSX: CCL.A; CCL.B), a world leader in specialty label, security and packaging solutions said it agreed to acquire Innovia for $1.13 billion, debt free and net of cash from a consortium of U.K. based private equity investors managed by The Smithfield Group LLP.
Innovia, headquartered in Wigton in the U.K., is a leading global producer of specialty, high performance, multi-layer, surface engineered BOPP films for label, packaging and security applications. The business has film extrusion, coating and metallizing facilities across the U.K., Belgium and Australia as well as high security, specialized polymer banknote operations in the U.K., Australia and Mexico with 1200 employees and sales offices in 16 countries around the world.
For 2017, Innovia is expected to generate net revenue of approximately $570 million and estimated EBITDA of $155 million.
“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,’ said Geoffrey T. Martin, President and Chief Executive Officer of CCL. “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.”
“CCL’s 2017 pro-forma annual sales are forecast to exceed $5.0 billion post close. The transaction will be financed from existing capacity in our revolving credit facility and a new US$ 450 million, two-year term loan provided by a syndicate of banks led by Bank of Montreal. At closing our expected pro-forma net debt to EBITDA leverage ratio is estimated at a conservative 2.5 times, with additional balance sheet liquidity of approximately $700 million,” added Martin.
CCL Industries employs more than 20,000 people operating 156 production facilities in 35 countries on 6 continents with corporate offices in Toronto, Canada and Framingham, Massachusetts.
CCL Label is the world’s largest converter of pressure sensitive and extruded film materials for a wide range of decorative, instructional and functional applications for large global customers in the consumer packaging, healthcare and chemicals, consumer durable, electronic device and automotive markets. Extruded and laminated plastic tubes, folded instructional leaflets, precision decorated and die cut components, electronic displays and other complementary products and services are sold in parallel to specific end-use markets.
Avery is the world’s largest supplier of labels, specialty converted media and software solutions to enable short-run digital printing in businesses and homes alongside complementary products sold through distributors and mass market retailers.
CCL Container is a leading producer of impact extruded aluminum aerosol cans and bottles for consumer packaged goods customers in the United States and Mexico. Checkpoint is a leading manufacturer of technology-driven, loss prevention, inventory management and labeling solutions, including RF and RFID-based, to the retail and apparel industry. CCL partly backward integrates into materials science with capabilities in polymer extrusion, adhesive development and coating, surface engineering and metallurgy that are deployed across all four business segments.
The deal is subject to regulatory and change of control approvals as well as customary completion procedures with closing expected by the end of the first quarter of 2017.