Avery Dennison Selling Two Businesses to CCL for $500 Million

Avery Dennison's Office and Consumer Products business in 2012 had sales of about $730 million.

Jan. 30, 2013 - Avery Dennison today announced that it has signed a definitive agreement to sell its Office and Consumer Products (OCP) and Designed and Engineered Solutions (DES) businesses to CCL Industries for $500 million in cash.

The deal is subject to customary closing conditions, adjustments and regulatory approvals, and is expected to be completed in mid-2013.

“This sale is consistent with our goal of maximizing the value of our businesses for Avery Dennison’s shareholders, and focusing on our industry-leading Pressure-sensitive Materials and Retail Branding and Information Solutions businesses,” said Dean A. Scarborough, Avery Dennison chairman, president and chief executive officer.

“CCL is one of our largest customers, and we have a long-standing relationship with them. We are pleased that they will become the steward of the Avery™ brand for office products and augment their specialty converting portfolio through this transaction.”

Geoffrey Martin, president and CEO of CCL Industries, said, "This acquisition has the potential to transform our company at many levels. We are acquiring the Avery brand as part of the transaction to build on the franchise established for many decades for labels and other printable media that consumers and businesses use in digital computer printers around the world.

"In addition, we are significantly expanding our CCL Label market sectors with our entry into the North American durable goods market. This acquisition is the largest in CCL''s history and takes the company''s pro-forma annual revenue above $2 billion for the first time. We know both businesses well and have admired the people and the products for many years," Martin said.

Avery Dennison said that it intends to use the expected net sale proceeds of approximately $400 million to repurchase shares and make an additional pension contribution.

Avery Dennison’s Office and Consumer Products business is one of the world’s leading suppliers of printable media and other products, with 2012 sales of approximately $730 million and adjusted operating income of approximately $86 million. OCP results are reported as discontinued operations.

Avery Dennison Designed and Engineered Solutions manufactures custom pressure-sensitive labels and coated films for durable goods, electronics and specialty packaging. The business unit’s 2012 sales were approximately $180 million, with adjusted operating income of approximately $19 million. DES results are currently reported in Other specialty converting businesses, but will be reclassified as discontinued operations as of the first quarter.

Combined 2012 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for OCP and DES was approximately $110 million, Avery Dennison said.

With headquarters in Toronto, Canada, CCL Industries currently employs approximately 6,600 people in 75 plants globally located to meet the sourcing needs of large international customers. CCL Label is the world''s largest converter of pressure sensitive and film materials for label applications and sells to leading global customers in the consumer packaging, healthcare, automotive and consumer durable segments. CCL Container and CCL Tube are leading producers of aluminum aerosol cans, bottles and extruded plastic tubes for the consumer products industry in North America.

Avery Dennison is a global leader in labeling and packaging materials and solutions with operations in more than 50 countries and 30,000 employees worldwide.

SOURCE: Avery Dennison Corp.