In what is being described as a “highly strategic opportunity,” CCL Industries Inc. is buying Innovia Group for $1.13 billion.
Innovia makes co-extruded, biaxially oriented polypropylene (BOPP) films that are used for labels, packaging and security applications, CCL said. The company is well known for making polymer money.
The acquisition is expected to bring $570 million in sales and $155 million of earnings before interest, taxes, depreciation and amortization to CCL, a Toronto-based labeling and packaging company, for 2017.
“Strategically, CCL has been looking for a way to get closer to the materials science of our industry for quite some time. And we're very pleased to have landed on a business that I think is a very good fit for our technology and our customers and our markets,” CCL CEO Geoffrey T. Martin said on a conference call to discuss the acquisition.
Innovia, based in Wigton, United Kingdom, has 1,200 employees and five production sites in the United Kingdom, Belgium, Australia and Mexico. Its Atlanta-based U.S. subsidiary, Innovia Films Inc., was ranked at No. 37 in the most recent Plastics News ranking of film and sheet makers in North America with an estimated $215 million in sales for the region.
The company holds the top position in providing polymer banknote substrate in the world and also is ranked first in BOPP pressure sensitive label films, CCL said.
“This is a very well managed business and we do not expect to incur any significant integration or restructuring expense, so limited to just around $5 million,” Martin said on the conference call.
CCL is buying Innovia from a consortium of private equity investors based in the United Kingdom and managed by the Smithfield Group LLP. The deal is expected to close early next year.