CCL purchases Steinbeis Packaging

CCL Industries Inc., a world leader in developing manufacturing, packaging and labeling solutions for the consumer products industry, announced that it has signed a definitive agreement to purchase Steinbeis Packaging. Based in Holzkirchen, Germany, Steinbeis supplies battery labels on a global basis and provides premium product decorative label solutions for the European consumer products market. The purchase price of approximately Cdn$ 80 million will be financed by cash on hand and bank debt. Closing of the transaction is scheduled for 31 January 2005.
In July of this year, CCL announced its intention to merge its European and Asian label operations with Steinbeis Packaging to form a new joint venture owned by the two companies. However, during negotiations, it was agreed that an outright purchase of the business would better enable synergies to be developed on a global basis. In 2004, sales from Steinbeis Packaging plants in the U.S., France, Germany and China will be approximately Cdn$ 140 million. The purchase will be on a debt- free / cash-free basis.
CCL Label will continue to build its network and increase investment in its European and Asian label manufacturing facilities, which are dedicated to serving large global customers in the consumer products, healthcare, and premium food and beverage markets. This will include capital investments of Cdn$ 18.5 million to increase capabilities in the fast growing markets of Eastern Europe and China. Construction of two new state-of-the-art greenfield plants is underway in Poznan, Poland and Guangzhou, China, with capacity planned to come on line in the second half of 2005.
Donald Lang, President and CEO of CCL Industries commented, “We are very pleased to continue building our global position in the highly fragmented label industry. This transaction accelerates CCL Label’s strategy of servicing our customers on a global basis and transforms our current business into the largest and fastest growing label network in Europe and Asia. Although we will not be joint venture partners with the Steinbeis family in this new structure, we look forward to continuing our excellent business relationship.”  Lang went on to say that, “In keeping with our performance objectives and measurement of success, this acquisition is expected to be accretive in 2005.”
Geoff Martin, President, CCL Label said, “This acquisition, coupled with the new
investments in Eastern Europe and China, will give CCL Label more than 30 sites worldwide in our network and total revenues of approximately Cdn$ 650 million. We will continue to operate as a global Label company dedicated to our largest customers in the consumer products and healthcare markets. However, we will also maintain our philosophy that local management with the autonomy to service our customers daily, close to their facilities in whichever part of the world we are needed, is the path to success in this business.”