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CCL Industries snaps up M&C’s Treofan Americas business
Posted on Friday, 09 March 2018 11:25
Management & Capitali (M&C) is selling its biaxially oriented polypropylene (BOPP) film manufacturing unit (Treofan Americas) to Canadian packaging and labelling company CCL Industries for USD 255.00 million, including assumed cash and debt.
Completion is slated for the second quarter of 2018, subject to customary closing conditions, including approvals from the relevant regulatory bodies.
Following the deal, the targeted businesses (Treofan America and Trespaphan Mexico Holdings) will trade under the Innovia brand, which is wholly-owned by CCL Industries.
The buyer claims to be the world’s largest converter of pressure sensitive and extruded film materials, with over 20,000 employees in 167 manufacturing facilities in 37 countries.
Its products have a range of decorative, instructional, functional and security applications and a used by government institutions, along with other clients in the packaging, healthcare, chemicals, and automotive industries.
CCL Industries anticipates adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) to reach USD 55.00 million by 2021 as a result of the acquisition.
Chief executive Geoffrey Martin said the deal “gives Innovia a solid strategic footprint for BOPP films in both North America and Europe, with highly complementary technologies and products”.
Martin described the combination of firms under a common brand as an “important new strategic initiative in the materials science arena”.
Treofan Americas operates in the US and Canada, as well as across Latin America, and has the capacity to produce 60,000 tonnes of BOPP film, which can be used for speciality applications in the consumer packaging and label markets.
Towards the end of 2018, the division intends to build a ten-metre wide BOPP extrusion line, which will increase production capacity by 30,000 tonnes and require an expansion to its Mexican facilities.
Construction costs from this additional project, estimated to reach USD 65.00 million, will be added to the purchase price at completion.
In 2017, Treofan Americas generated adjusted EBITDA of USD 40.00 million and sales totalling USD 212.00 million, 65.0 per cent of which can be attributed to transactions in the US, from its North Carolina-based sales office and distribution centre.
Private equity firm M&C, which is listed in Milan, will retain the Treofan trading name, along with the European businesses, following the sale.
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