Treofan Americas, acquired for US$ 255 million, including a state-of-the-art plant in Michoacan

9 March, 2018

Warning: foreach() argument must be of type array|object, bool given in /home/mexiconow/public_html/sites/mexiconow/wp-content/themes/mexiconowwpnew/single.php on line 253

Toronto-based CCL Industries Inc., a global supplier of specialty label, security and packaging solutions announced today that it has signed a binding agreement to acquire Treofan America Inc. and Trespaphan Mexico Holdings GmbH from their parent company M&C S.p.A., an Italian public company listed on the Milan stock exchange.

The entities to be acquired represent the “Treofan Americas” business in the United States, Latin America and Canada. M&C S.p.A. would continue to control the equivalent European business through Treofan Germany GmbH & Co. KG and Treofan Italy S.p.A which form no part of this transaction. The acquired Treofan entities will trade under the Innovia brand name post close with M&C S.p.A. retaining rights to the Treofan name.

Treofan Americas operates a state-of-the-art plant which manufactures biaxially oriented polypropylene (“BOPP”) film in Zacapu, Michoacan with capacity of 60,000 tons for specialty applications in consumer packaging and label markets.

Approximately 65% of sales are transacted in the United States from a sales office and distribution center in North Carolina, the remaining balance predominantly in Latin America. In 2017, Treofan Americas sales were approximately US$ 212 million with an estimated, adjusted EBITDA of US$ 40 million.

The purchase price, net of cash and debt assumed, is approximately US$ 255 million with closing anticipated in the second quarter of 2018 subject to regulatory approvals and customary completion procedures.

Treofan Americas will install a new 10-meter-wide BOPP extrusion line in late 2018 adding 30,000 tons of capacity requiring a significant facility expansion in Mexico. CCL Industries agreed to reimburse M&C S.p.A. for all cash capital expenditures incurred on this project at closing as an increase to the purchase price.

The company will subsequently complete the project thereafter as normal course 2018 capital expenditure. The total capital expenditure on the project is estimated at US$ 65 million with approximately 50% cash outlay incurred by the anticipated closing date.

Given the substantial investment plus legacy business growth, CCL Industries is targeting an increase in acquired EBITDA to approximately US$ 55 million by 2021 at current exchange rates.

MexicoNow

- German polypropylene film manufacturer Treofan invests US$ 45 million at Mexican plant

- GKN in talks with Dana over sale of auto division; two Mexican plants involved

- FCA plans to spin-off its Magneti Marielli subsidiary, which operates six plants in Mexico