Packaging supplier CCL Industries Inc. plans to diversify into wine labels with the acquisition of Clear Image Labels Pty. Ltd. of Sydney, Australia.
Clear Image makes paper and plastic film pressure-sensitive labels for Australia's wine industry at plants in Sydney and the Barossa Valley wine-growing region, in South Australia. The firm exports some labels to the U.S.
CCL Executive Vice President Steve Lancaster said his company plans to develop the wine label business into a global one. Its Australian operation also could be a conduit to sell a wider range of labels into Australia's market, Lancaster said. CCL now manufactures labels for food and beverages, and personal- and health-care products, among others.
The Toronto-based firm also extrudes and decorates squeezable tubes for the personal-care and cosmetic markets, and manufactures aluminum containers.
CCL expects to close the Clear Image deal in April. It agreed to pay C$34 million (US$33.4 million) in a combination of cash, stock and absorbed debt.
Clear Image is expected to log sales of C$21 million (US$20.7 million) and earnings before interest, taxes and amortization of C$5.5 million (US$5.42) for the fiscal year ending June 30.
``This is an interesting transaction for CCL as it simultaneously expands our geographic footprint and also takes us into a new segment of the beverage industry which has exhibited above-average growth rates,'' said Donald Lang, CCL chief executive officer and vice chairman, in a March 17 news release.
Clear Lake Managing Director and major shareholder Scott Springett will continue with the business after the transaction.