Avery Dennison To Buy European Business Of Mactac For EUR 200 Mln, Incl.debt

(RTTNews) - Avery Dennison (AVY) announced a definitive agreement to acquire the European business of Mactac from Platinum Equity, a California-based private equity firm, for the purchase price of 200 million euros including assumed debt.

With 2015 year-end run-rate revenues of 147 million euros, or approximately $170 million, and approximately 470 employees, the business is a manufacturer of high-quality pressure-sensitive materials, serving several high-value segments, including graphics, specialty labels and industrial tapes. Mactac's core product lines complement Avery Dennison's existing graphics portfolio.

The acquisition is expected to have an immaterial impact to earnings per share in 2016 and be approximately ten cents accretive to EPS in 2017.

Avery Dennison will fund the acquisition with existing cash and credit facilities. The acquisition is expected to close within three months, subject to customary conditions and approvals.

Separately, Avery Dennison said it now expects 2016 earnings per share of $3.25 to $3.40. Excluding an estimated $0.20 per share for restructuring charges and other items, and $0.30 per share for non-cash charges to settle certain U.S. pension obligations, the company now expects adjusted earnings per share of $3.75 to $3.90. Analysts polled by Thomson Reuters expect the company to report earnings of $3.75 per share for fiscal year 2016. Analysts' estimates typically exclude special items.

"We have raised our outlook for full-year adjusted earnings per share, reflecting some relief from currency translation headwinds, combined with strong operating performance in the first quarter. We continue to remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation through a balance of profitable growth and capital discipline," said Mitch Butier, Avery Dennison president and chief operating officer.