Avery Dennison to Sell Two Units to CCL After 3M Deal CollapsedBrooke Sutherland
Avery Dennison Corp. agreed to sell two units to CCL Industries Inc., a maker of specialty packaging, for $500 million in cash after 3M Co. walked away from an offer for its office products division in October.
A syndicate of banks has committed to provide debt financing to complete the deal, which includes the office-products business and Avery Dennison’s label-converting unit, Toronto-based CCL Industries said today in a statement.
The deal ends Avery Dennison’s search for a buyer for the office-products unit, which sells labels, binders and writing instruments with brands such as Hi-Liters and Marks-A-Lot markers. 3M abandoned a $550 million offer for the business last year after the U.S. Justice Department opposed the deal because of antitrust concerns.
A takeover would have given St. Paul, Minnesota-based 3M more than 80 percent of the U.S. market for labels and sticky notes, the agency said.
The office product and label-converting divisions had combined revenue of about $910 million in 2012, according to the statement. CCL Industries’ purchase of the two units is the largest deal in the company’s history, CEO Geoffrey Martin said. CCL expects the transaction to close by mid-2013 and will add to earnings in 2014.
Avery Dennison, based in Pasadena, California, surged 6.1 percent to $38.33 at 9:54 a.m. New York time. CCL Industries advanced 16 percent to $52.88.
Avery Dennison also reported fourth-quarter earnings today that beat analysts’ estimates. Profit excluding certain items was 54 cents a share, topping the 49-cent average of estimates compiled by Bloomberg.
Earnings in 2013 excluding restructuring costs and other items will be $2.40 to $2.80 a share, the company said. Analysts projected $2.40, on average.