Canada's CCL to buy British bank note maker Innovia for $842 million
By Aravind K and Esha Vaish
(Reuters) - Canadian label and packaging maker CCL Industries Inc (CCLb.TO: Quote) said it would buy Innovia Group, which supplies the new UK plastic five pound note that has fallen foul of vegetarians, for around C$1.13 billion ($842 million).
The acquisition of UK-based Innovia is expected to make CCL the world leader in the fast-growing polymer banknote market.
Britain is one of the largest economies to adopt plastic banknotes and they are already in circulation in Canada, Mexico, New Zealand and Australia.
But the new five pound note, made of a thin and flexible plastic designed to be cleaner and harder to forge, has fallen foul of thousands of people who object to the use of animal fats in their manufacture.
The deal is the latest in a string of takeovers of British companies by foreign firms that have taken advantage of the sharp fall in the sterling GBP= since Britain voted to leave the European Union. British tech company ARM was snapped up by Japan's SoftBank Group Corp (9984.T: Quote) in the days after the Brexit vote and Rupert Murdoch's Twenty-First Century Fox Inc (FOXA.O: Quote) has struck a preliminary deal to buy the 61 percent of pay-TV firm Sky Plc SKY.L it does not already own. CCL is buying Innovia debt free and net of cash from a consortium of UK-based private equity investors managed by The Smithfield Group LLP. It expects Innovia to generate net revenue of about C$570 million for 2017.
CCL's pro-forma annual sales are forecast to exceed C$5 billion after the deal, expected by the end of first quarter of 2017, the company said.
Some of the stake is being sold by Epiris, the portfolio manager of Electra Private Equity (ELTA.L: Quote), which invested 40 million euros ($41.53 million) in Innovia in 2014.
For Electra, the deal comes in the midst of its separation from its investment management team that renamed itself Epiris this month, as part of a major shake up of Britain's oldest private equity firms. Continued...