CCL Industries Inc.

CCL Industries Inc.

October 04, 2007 09:28 ET

CCL Industries Agrees to Sell Its 40% Interest in European Joint Venture

TORONTO, ONTARIO--(Marketwire - Oct. 4, 2007) -

Attention Business Editors:

CCL Industries Inc. (TSX:CCL.A)(TSX:CCL.B), a world leader in specialty packaging and labelling solutions for the consumer products and healthcare industries, announced today it has signed an agreement to sell its 40% interest in its European joint venture, ColepCCL, Embalagens e Enchimentos S.A. to its majority partner, RAR - Sociedade de Controle (Holding), S.A., based in Portugal.

CCL's merger with COLEP in 2004 created the largest European contract manufacturer of personal care, household and pharmaceutical products. In 2006, CCL's proportional share of ColepCCL's sales was $182.7 million and the joint venture contributed $18.0 million of earnings before interest and taxes and $25.5 million in EBITDA to CCL's financial results.

CCL will receive approximately $140 million in cash, 50% payable on closing with the balance to be paid at the end of February 2008 for its interest in the joint venture, which, including dividends received, will nearly double CCL's return on its original investment. ColepCCL will retain all of the net debt in the business upon closing. CCL's current share of the net debt is approximately $28 million. The transaction is expected to close by the end of November and is subject to normal regulatory approvals.

Donald G. Lang, Vice Chairman and Chief Executive Officer of CCL Industries Inc. said, "RAR has been an excellent joint venture partner over the last three and a half years and together, we have benefited from the success of the business. ColepCCL's management team has met all of our expectations by achieving the synergies that were identified at the time of the merger and growing the business." Mr. Lang also commented that "ColepCCL has many opportunities for both internal growth and acquisitions; however, upon evaluating our own growth opportunities, we have decided to focus our investment dollars in the businesses that we control.

"Over the last five years, CCL has consistently delivered improved results with focused strategic capital investments in our core businesses and bolt on acquisitions at CCL Label, which have met our financial hurdles. We now have greater flexibility with this process and can accelerate building the great franchises in our portfolio, which now make CCL a pure global specialty packaging company."

CCL manufactures pressure-sensitive, shrink sleeve and in-mould labels, aluminum containers and plastic tubes for leading global companies in the home and personal care, healthcare and specialty food and beverage sectors. With headquarters in Toronto, Canada, CCL Industries employs approximately 5,000 people and operates 49 production facilities in North America, Europe, Latin America and Asia.

Statements contained in this Press Release, other than statements of historical facts, are forward-looking statements subject to a number of uncertainties that could cause actual events or results to differ materially from some statements made.

Contact Information

  • CCL Industries Inc.
    Steve Lancaster
    Executive Vice President and
    Chief Financial Officer
    (416) 756-8517