CCL Industries has signed a binding agreement to acquire Treofan America and Trespaphan Mexico from their ultimate parent, Italy-based M&C.
The entities to be acquired represent the Treofan Americas business in the US, Latin America and Canada. M&C will continue to control the equivalent European business through Treofan Germany and Treofan Italy, which form no part of this transaction. The purchase price, net of cash and debt assumed, is approximately US$255 million, with closing anticipated in the second quarter of 2018, subject to regulatory approvals and customary completion procedures.
Treofan Americas is a producer of BOPP film and is based in Zacapu, Mexico, with capacity of 60,000 tons for specialty applications in consumer packaging and label markets. Approximately 65 percent of sales are transacted in the US from a sales office and distribution center in North Carolina, the remaining balance predominantly in Latin America.
The acquired Treofan entities will trade under the Innovia brand name post close with M&C retaining rights to the Treofan name. CCL completed the takeover of Innovia last year, providing a platform for the world’s largest specialty label business to grow and further enhance its offer in security printing, polymer extrusion and surface engineering.
Geoffrey T. Martin, CCL president and CEO, commented: ‘The proposed acquisition gives Innovia a solid strategic footprint for BOPP films in both North America and Europe with highly complementary technologies and products. The business will be combined with Innovia in the Americas under a common brand and the leadership of Guenther Birkner, who heads our label interests globally in the food and beverage, and healthcare and specialty markets as well as this important new strategic initiative in the materials science arena.
‘I'd like to take this opportunity to acknowledge the deeply experienced Treofan Americas people. We are excited about the prospect of them joining our company and look forward to their contributions as we move forward with this exciting new initiative.’
Treofan Americas is to install a 10m-wide BOPP extrusion line in late 2018, adding 30,000 tons of capacity requiring a significant facility expansion in Mexico. CCL has agreed to reimburse M&C for all cash capital expenditures incurred on this project at closing as an increase to the purchase price. The project will be completed as normal course 2018 capital expenditure. The total capital expenditure on the project is estimated at US$65 million with approximately 50 percent cash outlay incurred by the anticipated closing date.