Avery Dennison Selling Some Operations to 3M for $550 Million
Jan. 3, 2012 - Avery Dennison Corp., which sells labels, packaging material, office supplies and adhesives, is selling its office and consumer products operations to 3M Co. for $550 million in cash.
The office and consumer products business includes labels, binders, presentation products, filing and indexing products, writing instruments, and other office and home organization products. It also includes the Avery, HI-LITERS,and Marks-A-Lot brands in the U.S., Canada, Germany, France, the United Kingdom, Australia, New Zealand and several other countries.
The division is based in Brea, California, and includes about 3,000 employees globally. Sales for 2011 are expected to be about $765 million.
Avery Dennison said that proceeds from the sale will be used to lower debt, buy back stock and to make additional pension contributions, the company said Tuesday.
In October Avery Dennison reported that its third-quarter profit dropped 22 percent due to ongoing weak demand for its products. The company also cut its full-year outlook at the time.
Avery Dennison said that it will now concentrate its efforts on its Pressure-sensitive Materials and Retail Branding and Information Solutions businesses.
3M, based in Minneapolis, said that it was buying the office and consumer products operations to expand its presence in the office, education and consumer products category. It expects the acquisition will dilute earnings by about six cents per share in the year after the deal closes. The deal is expected to close during the second half of 2012.
"This acquisition complements our global business, which includes our iconic Post-it and Scotch brands, and will allow us to better serve our customers with accelerated product innovation," Bill Smith, vice president and general manager of the 3M Office Supplies division, said in a statement.
Avery Dennison is based in Pasadena, Calif. The company anticipates 2011 pro forma sales of about $6 billion, excluding the office and consumer products business.
SOURCE: Avery Dennison Corp.