The Canada-based group, which is a world leader in developing manufacturing, packaging and labelling solutions for the consumer products industry, said it had signed a definitive agreement to purchase Steinbeis Packaging.
Based in Holzkirchen, Steinbeis supplies battery labels on a global basis and provides premium product decorative label solutions for the European consumer products market, many of which are for personal care applications.
CCL said that the purchase price of approximately CAD$ 80 million (€48.1m) will be financed by cash on hand and bank debt. The transaction is scheduled to be completed January 31, 2005.
In July of this year, CCL announced its intention to merge its European and Asian label operations with Steinbeis Packaging to form a new joint venture owned by the two companies. However, during negotiations, it was agreed that an outright purchase of the business would better enable synergies to be developed on a global basis.
In 2004, sales from Steinbeis Packaging plants in the US, France, Germany and China will be approximately CAD$140 million. The purchase will be on a debt- free / cash- free basis.
CCL Label says it will continue to build up its network European and Asian label manufacturing facilities. This will include capital investments of CAD$18.5 million to increase capabilities in the fast growing markets of Eastern Europe and China. Construction of two new state-of-the-art greenfield plants is underway in Poznan, Poland and Guangzhou, China, with capacity planned to come on line in the second half of 2005.
Donald Lang, company CEO said: "This transaction accelerates CCL Label's strategy of servicing our customers on a global basis and transforms our current business into the largest and fastest growing label network in Europe and Asia."
Lang also said he expected that the acquisition would provide a significant boost to the company's financial performance in 2005.
The acquisition, coupled with the new investments in Eastern Europe and China, will give CCL Label more than 30 sites worldwide in its network and total revenues of approximately CAD$ 650 million. Currently the company has a total workforce of over 5,500.