TORONTO -- CCL Industries plans to boost its labels lineup and enter office products by acquiring two business units from Avery Dennison Corp. for $500 million in cash.
CCL, already a major manufacturer of labels, agreed to buy Avery Dennison's office and consumer products and designed and engineered solutions businesses on a debt-free basis. A banking syndicate is committed to provide debt financing and CCL expects to complete the deal in mid-2013, pending regulatory approvals.
3M Co of St. Paul, Minn., had planned to buy the office products business but the deal was scuttled last year after the U.S. Justice Department withheld approval because of antitrust concerns.
Avery Dennison makes a wide array of plastic, paper and multimaterial labels for some 10,000 customers around the world in consumer products and durable goods. Its office products business is well known for marketing labels, sticky notes, binders and pens such as Hi-Liters.
The businesses to be acquired had sales of about $910 million in 2012. The revenue will lift CCL's annual sales above $2 billion for the first time.
"We know both businesses well and have admired the people and the products for many years," states CCL President and CEO Geoffrey Martin in a Jan. 30 news release.
CCL, based in Toronto, claims to be the world's largest converter of pressure sensitive and film materials for label applications and it supplies global customers in consumer packaging, healthcare, automotive and consumer durable markets. Its CCL Tube business is a major extruder of plastic tubes for consumer products in North America.
In 2011, CCL embarked on a $30 million expansion of its labels business in emerging markets in Thailand, Brazil and Saudi Arabia. The firm runs 75 plants worldwide and employs about 6,600.