Wendel welcomes today’s announcement by Constantia Flexibles, one of the world’s leaders in flexible packaging, that it has signed an agreement to sell its Labels business to Multi-Color Corporation, for an enterprise value of approximatley €1.15 billion(1.3 billion USD). Subject to customary regulatory approvals, the sale transaction is expected to be finalized in the fourth quarter of 2017. The majority of the transaction is payable in cash, while Constantia Flexibles will hold a 16.6 % equity holding in Multi-Color, thereby becoming its largest shareholder.
This value-creating transaction will give Constantia Flexibles additional resources to bolster its growth strategy in the flexible packaging market, where it is a leader in segments such as confectionery foils, die-cut lidding, alu-container systems and pharmafoil. Moreover, in becoming the largest shareholder of a company bringing together Constantia’s and Multi-Color’s labels businesses, Constantia Flexibles will retain an exposure to the growth of this market.
Frédéric Lemoine, Chairman of Wendel’s Executive Board and Chairman of the Supervisory Board of Constantia Flexibles, said, “I am very pleased with this excellent transaction, which will give Constantia Flexibles additional resources to pursue its growth and development in flexible packaging in the coming years.
Since 2015, Wendel has supported Constantia Flexibles in its international growth and development. During this time, Constantia has, in particular, acquired five companies in Europe and emerging markets. Today’s strategic transaction will enable Constantia Flexibles to focus on flexible packaging and step up its investments in innovation and growth through further value-creating acquisitions that will give it exposure to new markets and new initiatives that will generate organic growth.”
Alexander Baumgartner, CEO of Constantia Flexibles, said, “Following a detailed strategy review, we decided that our top-performing Labels division would be better suited with another partner, which will support its ongoing growth story. At the same time, Constantia Flexibles will participate in the future success story of Multi-Color as its largest shareholder. Constantia Flexibles will use proceeds from the transaction to deleverage its balance sheet and enable further acquisitions in the dynamic and consolidating flexible packaging industry. We will also focus on innovative products and services, as well as new technologies to strengthen our existing Food and Pharma divisions.”
Constantia Labels is a global supplier of labels to the beverage, food and home & personal care industries (HPC). The Labels division achieved sales of €605 million in 2016, compared with Constantia Flexibles’ total sales of €2.1 billion in the same year.
Established in 1916, Multi-Color is one of the largest label companies in the world, serving some of the most prominent brands in the following market segments: healthcare, HPC, food & beverage, consumer durables and wine & spirits. Following completion of the transaction, Multi-Color is expected to achieve pro forma sales of ca. 1.6 billion USD and EBITDA of ca. 300 Million USD.
This transaction will make a positive contribution to long-termvalue creation at Constantia Flexibles, which is 60.5% owned by Wendel, its majority shareholder.