Avery Dennison acquires Paxar
29/03/2007
Avery Dennison Corporation has signed an agreement to acquire all outstanding shares of Paxar for $30.50 per share in a cash transaction valued at approximately $1.34 billion. The transaction is expected to enhance Avery Dennison’s ability to compete and grow in the expanding $15 billion-plus global retail information and brand identification market.
Avery Dennison’s Retail Information Services (RIS) business represents one of its fastest-growing units. It provides brand identification and supply chain management solutions primarily for manufacturers and retailers, including tag and label design and printing; inventory and shipment tracking; and data management systems.
It expects annual cost savings of approximately $90 to $100 million, with similar infrastructure enabling the elimination of redundant production costs and reductions in selling, general and administrative expenses, including corporate overhead and back office support. It currently estimates that the acquisition will involve integration costs, including restructuring and asset impairment charges, ranging from $100 to $125 million, plus information technology (IT) integration costs and other IT investments of at least $50 million.
The transaction is expected to close by the end of the year and is subject to Paxar shareholder approval, as well as regulatory approval.
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