Canadian Manufacturing

Toronto’s CCL Industries to buy U.K. polymer banknote maker in $1.3B deal

Acquisition will give Canadian label maker a leading position in the growing market for polymer cash used in a number of countries, including Canada


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Canada has been using polymer banknotes for about five years; and a growing number of countries are making the switch

TORONTO—CCL Industries Inc. has a $1.3-billion friendly deal to acquire a U.K.-based company that makes polymer banknotes.

The Toronto-based company says the acquisition of the Innovia Group will give it a leading position in the growing market for the highly secure type of banknotes, which the Bank of Canada has been using for about five years.

Innovia’s specialized banknote operations are in the United Kingdom, Australia and Mexico. It also is a producer of multi-layer films for labels, packaging and security applications.

The U.K.-based company is expected to generate $570 million of net revenue in 2017 and CCL estimates its revenue next year will be above $5 billion including Innovia.

CCL is buying Innovia debt-free from a consortium of U.K.-based private equity investors managed by the Smithfield Group. The deal is expected to close by the end of the first quarter of 2017.

The Toronto-based company—which owns the Avery label business, among other things—will borrow US$450-million from a syndicate led by Bank of Montreal and draw on an existing credit capacity to finance the transaction.


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