CCL Industries, a provider of specialty label, security and packaging solutions, has agreed to acquire Treofan America and Trespaphan Mexico from their parent firm M&C in a deal worth $225m.
The entities considered for acquisition represent the Treofan Americas business in the US, Latin America and Canada.
Treofan Americas is engaged in the production of biaxially oriented polypropylene (BOPP) film. It has production capacity of 60,000 tons for specialty applications in consumer packaging and label markets.
The firm supplies OPP films to the flexible packaging, labels, tobacco, and specialty film industries.
Upon completion of the deal, CCL Industries plans to trade the acquired Treofan entities under the Innovia brand.
In late 2018, Treofan Americas plans to install a new 10m-wide BOPP extrusion line in a bid to add 30,000 tons of capacity at its facility in Mexico.
However, CCL Industries agreed to reimburse M&C for all cash capital expenditures incurred on the expansion project, which is estimated to cost $60m, at closing of the deal.
CCL Industries president and CEO Geoffrey Martin said: “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 & Beverage and Healthcare & Specialty markets as well as this important new strategic initiative in the materials science arena.
Subject to regulatory approvals and customary completion procedures, the transaction is planned to be completed in the second quarter of 2018.
However, the transaction excludes M&C’s European business Treofan Germany and Treofan Italy and would continue to operate them.
Last month, CCL Industries reported increased sales, operating income and net earnings by 19.6%, 22.2% and 36.9% to $4.8bn, $737.5m and $474.1m, respectively in 2017, compared to 2016 results.
