Business
CCL Industries Agrees to Sell its 40% Interest in European Joint Venture
CCL Industries Agrees to Sell its 40% Interest in European Joint Venture.
About this update from Ccl Industries Inc. Class A
[{"type":"text","content":"\n\n\n\nStock Symbol: TSX - CCL.A and CCL.B\n\n\nTORONTO, Oct. 4 /CNW/ - CCL Industries Inc., a world leader in specialty\npackaging and labelling solutions for the consumer products and healthcare\nindustries, announced today it has signed an agreement to sell its 40%\ninterest in its European joint venture, ColepCCL, Embalagens e Enchimentos\nS.A. to its majority partner, RAR - Sociedade de Controle (Holding), S.A.,\nbased in Portugal.\n\n\nCCL's merger with COLEP in 2004 created the largest European contract\nmanufacturer of personal care, household and pharmaceutical products. In 2006,\nCCL's proportional share of ColepCCL's sales was $182.7 million and the joint\nventure contributed $18.0 million of earnings before interest and taxes and\n$25.5 million in EBITDA to CCL's financial results.\n\n\nCCL will receive approximately $140 million in cash, 50% payable on\nclosing with the balance to be paid at the end of February 2008 for its\ninterest in the joint venture, which, including dividends received, will\nnearly double CCL's return on its original investment. ColepCCL will retain\nall of the net debt in the business upon closing. CCL's current share of the\nnet debt is approximately $28 million. The transaction is expected to close by\nthe end of November and is subject to normal regulatory approvals.\n\n\nDonald G. Lang, Vice Chairman and Chief Executive Officer of CCL\nIndustries Inc. said, "RAR has been an excellent joint venture partner over\nthe last three and a half years and together, we have benefited from the\nsuccess of the business. ColepCCL's management team has met all of our\nexpectations by achieving the synergies that were identified at the time of\nthe merger and growing the business." Mr. Lang also commented that "ColepCCL\nhas many opportunities for both internal growth and acquisitions; however,\nupon evaluating our own growth opportunities, we have decided to focus our\ninvestment dollars in the businesses that we control.\n\n\n"Over the last five years, CCL has consistently delivered improved\nresults with focused strategic capital investments in our core businesses and\nbolt on acquisitions at CCL Label, which have met our financial hurdles. We\nnow have greater flexibility with this process and can accelerate building the\ngreat franchises in our portfolio, which now make CCL a p...