TORONTO—CCL Industries plans to expand its plastic and other pressure-sensitive labels business by purchasing Sonoco Products Co.'s Engraph business for undisclosed terms.
Toronto-based CCL estimated Engraph's 1997 sales at about C$190 million (US$133 million). CCL's label division sales last year were about C$210 million (US$147 million). The firms expect to finalize the deal in March.
Bob Broad, CCL vice president, said plastic pressure-sensitive labels have been gaining market share from paper types, especially in insert-mold labeling. He estimated that after the deal, plastic labels will account for 40-45 percent of CCL's label division sales.
Atlanta-based Engraph has 1,000 employees at seven U.S. sites and in plants in Mexico and Puerto Rico. CCL's label division runs 10 plants in Canada, Mexico and Puerto Rico. Both firms buy polypropylene and polyethylene film to convert to labels.
``The acquisition is consistent with our strategy of focusing on higher-growth industries and with more ownership in technology,'' said Wayne McLeod, CCL Industries president and chief executive officer. Last year CCL bought Teledyne Packaging, a producer of plastic and metal tubes and closures, and Seda Specialty Packaging Corp., a tubing extruder and molder of closures and bottles.
CCL plans to finance the Engraph acquisition with funds from the recent sale of its Kolmar cosmetic and powder contract manufacturing businesses.