TORONTO—Canadian label and packaging giant CCL Industries Inc. is expanding into the loss prevention market with a half-billion acquisition.
The company has reached an agreement to buy New Jersey-based Checkpoint Systems Inc. for approximately $556 million (US$422 million), or US$10.15 per share. The all-cash deal includes the company’s net cash and has been approved by both companies’ boards.
“We have admired Checkpoint for many years as they built a unique, leading global position providing technology-driven label solutions to the retail & apparel industry,” Geoffrey Martin, president and CEO of CCL, said. “We are very pleased to welcome their deeply experienced people to CCL where they will continue to focus on this important industry for emerging ‘smart label’ technologies.”
Predominantly a manufacturer of anti-theft tags for retail merchandise, Checkpoint has 21 manufacturing facilities and operations in 29 countries.
CCL said the deal was a “compelling” opportunity to increase its breadth and scale, building on Checkpoint’s blue-chip customer base of global retailers and apparel brands. The acquisition is also expected to produce cost-saving synergies of about $40 million, with Checkpoint operating as a new segment of CCL following the deal’s closure.
The Toronto-based firm, which employs 13,000 people across 122 production facilities, said the offer represents a 29 per cent premium on Checkpoint’s March 1 closing price. CCL plans to fund the transaction wholly through its existing revolving credit facility.
The deal is subject to customary conditions and expected to close in mid-2016.