Constantia Flexibles has completed the €1.15bn ($1.3bn) divestiture of its labels division to Ohio-based printing company Multi-Color Corporation following the receipt of regulatory authorities.
As part of the deal, Constantia Flexibles has secured about €830m in cash. The company will continue to participate in the future efforts of Multi-Color via a 16.6% shareholding.
The transaction clubs the Food and Beverage business of Constantia Flexibles' former labels division with the wine and spirit, and home and personal care platforms of Multi-Color.
The two businesses will have combined annual revenues of around $1.7bn.
Constantia Flexibles CEO Alexander Baumgartner said: “Constantia Flexibles will use the proceeds from the transaction to deleverage its balance sheet and enable further acquisitions in the dynamic and consolidating flexible packaging industry.
“We will also focus on innovative products and services, as well as new technologies to strengthen our existing Food and Pharma businesses.”
With the acquisition, Multi-Color expects to see further scope for growth in home and personal care segments through the European operational presence and assets of Constantia Labels.
Constantia Labels expects to see growth in its food and beverage divisions through the US operational footprint and assets of Multi-Color.
Their consolidated combined footprint in Asia is expected to deliver additional revenue opportunities.
The deal will also see 2,800 employees of Constantia taken into the Multi-Color team.
Constantia Flexibles supervisory board chairman Bernard Gautier said: “This deal provides the company with an opportunity to refocus on its core business and grow more rapidly.
“It also gives the company an indirect leadership position in the label industry as the largest shareholder of Multi-Color, with a 16.6% stake in its equity.”
Gautier is also the member of the executive board at Wendel which is the majority shareholder of Constantia Flexibles, with a stake of 60.5%.
