CCL sells North American Custom Manufacturing division

CCL Industries Inc., has agreed to sell its North American CCL Custom Manufacturing Division to KCP Income Fund for approximately Cdn $265 million in cash. The proceeds from the sale will fund the continued growth of CCL’s higher growth Label and Container businesses through further acquisitions and technology improvements. The Company may also repay debt, and repurchase stock.
CCL Custom Manufacturing operates one plant in Canada and three in the US. These facilities, their customer base and product capabilities will provide a strategic enhancement to KCP’s contract manufacturing business, which is focused on the retail branded household cleaner market. CCL Custom Manufacturing’s 2,200 employees will continue with the business.
The North American Custom Manufacturing Division generated sales of Cdn $604.6 million in 2004 and accounted for Cdn $26.6 million of CCL's consolidated operating income. Once the sale is completed, CCL's annualized revenues will still be in excess of Cdn $1.0 billion.
Donald Lang, President and CEO stated, “CCL Industries started as a small custom manufacturer in Toronto 54 years ago and we have enjoyed a long and successful history with CCL Custom Manufacturing. The quality of the business and its people has enabled us to derive significant value for the business, making this transaction possible.”
Lang continued, “This completes the dramatic transformation of CCL that we started five years ago, with CCL now emerging as a pure specialty packaging company focusing on our high growth Label and Container businesses. The divestitures of non-core businesses and the focus on cash flow have enabled us to invest in new technology, upgrade facilities and pursue international growth, creating the largest label converting network in North America, Europe and Asia, and the most innovative aluminum container business.”