CCL Industries to Acquire Innovia Group for $1.13 Billion

CCL Industries Inc. (CCL), a world leader in specialty label, security and packaging solutions for global corporations, government institutions, small businesses and consumers, has announced that it has entered into a definitive agreement to acquire the Innovia Group of companies (Innovia) for approximately $1.13 billion, debt free and net of cash from a consortium of U.K.-based private equity investors managed by The Smithfield Group LLP. The transaction is subject to regulatory and change of control approvals as well as customary completion procedures with closing expected by the end of the first quarter, 2017.

"This transaction is another transformative acquisition for CCL, propelling the company to world leadership in the disruptive, fast growing polymer banknote market while strengthening our depth in the materials science arena with proprietary BOPP films technology for the label, packaging and security sectors," Geoffrey T. Martin, president and CEO of CCL, said. "We expect to find significant operational, customer and product innovation growth opportunities between Innovia and our end use facing businesses at CCL Label, CCL Design, Checkpoint and Avery. We are very pleased to welcome Innovia’s deeply experienced industry people to our company and look forward to an exciting future together."

Martin concluded, "CCL's 2017 pro-forma annual sales are forecast to exceed $5.0 billion post close. The transaction will be financed from existing capacity in our revolving credit facility and a new US$ 450 million, two-year term loan provided by a syndicate of banks led by Bank of Montreal. At closing our expected pro-forma net debt to EBITDA leverage ratio is estimated at a conservative 2.5 times, with additional balance sheet liquidity of approximately $700 million.”

Innovia, headquartered in Wigton in the U.K., is a leading global producer of specialty, high performance, multi-layer, surface engineered BOPP films for label, packaging and security applications. The business has film extrusion, coating and metallizing facilities across the U.K., Belgium and Australia as well as high security, specialized polymer banknote operations in the U.K., Australia and Mexico with 1,200 employees and sales offices in 16 countries around the world. For 2017, Innovia is expected to generate net revenue of approximately $570 million and estimated EBITDA of $155 million.

The Smithfield Group LLP buys, operationally improves and grows businesses headquartered in Europe and North America.

All figures in the press release are in Canadian dollars unless otherwise noted. The exchange rate used was 1.4 C$ / Euro

Source: CCL Industries.