CCL increases focus through divestments

- Last updated on GMT

CCL Industries, that develops manufacturing, packaging and
labelling solutions for the consumer products industry, is to sell
four non-core business units in its Container Division.

CCL Industries, that develops manufacturing, packaging and labelling solutions for the consumer products industry, is to sell four non-core business units in its Container Division.

The company has sold three North American business, together with an operation in Costa Rica. These include CCL's​aluminum tube plant in Harrisonburg, Virginia, the laminate tube facility in Swedesboro, New Jersey, the plastic jar plant in Plattsburgh, New York and the San Jose, Costa Rican facility that manufactures a variety of containers for the Central American market.

The purchaser is a private Ontario limited partnership, 50 per cent owned by Douglas Brent, Hollis Brent and Gary Ullman, and 50 per cent owned by CCL, and will operate under the name of IntraPac. Ullman, a former senior executive of CCL, will be the president and chief executive officer.

CCL will sell the units for approximately CD$74 million (€49.4m) in cash and CD$13 million in equity of IntraPac L.P. In addition, CCL will be entitled to additional consideration should future performance exceed specified benchmarks.

In 2002, the businesses accounted for approximately CD$119 million, $21.4 million and $11.3 million in sales, EBITDA and operating income respectively.

The company said this week that the disposition will result in a loss of approximately CD$6 million after tax and will be recorded as an unusual item in the third quarter ending September 30, 2003. According to a statement this week, the new owners have the option to acquire CCL's residual equity in the partnership. CCL will carry its 50 per cent interest as an equity investment.

Donald Lang, president and chief executive officer of CCL Industries said:" CCL is now focused on three great business franchises with the resources to support further growth and profitability improvement through capital reinvestment and by acquisition as seen in our announcement of July 22, 2003 regarding the acquisition of Avery Dennison's European label converting business."

Related topics: Packaging & Design

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