CCL Industries invests in Middle East label company

2 Min Read
CCL Industries invests in Middle East label company

CCL Industries Inc., a leader in specialty packaging solutions for consumer products and healthcare industries, announced a binding agreement to acquire a 50 percent  interest in Pacman-CCL, a privately owned

group of label companies based in Dubai in the United Arab Emirates with

additional operations in Cairo, Egypt and Muscat, Oman. Pacman-CCL has been a

license holder of CCL Label since 2009. The remaining 50percent  interest in the

venture will continue to be held by Ali Saeed Juma Albwardy who, through his

holding entity Albwardy Investment, has overseen the growth of the company for

more than two decades.

CCL Industries will pay US$18.5 million in cash to acquire its interest in

the venture. Pacman-CCL generated sales of US$25.8 million in the year ending

December 31, 2010, with net after tax earnings of approximately US$4.6 million.

Closing of this transaction is expected to occur this summer after certain

administrative procedures are completed. The venture is expected to have a small

net cash position on closing.

The agreement also binds CCL and Albwardy to complete an investment in a new facility currently under construction in Jeddah, Saudi Arabia in 2011 with an estimated total cost of US$4  million to be funded

by a combination of debt and additional equity in the new operation shared

equally by the parties. CCL expects its own equity contribution to be funded by

dividends from the venture in its first year. The partners have also agreed in principle to a prospective future greenfield investment by Pacman-CCL in India.

Geoffrey Martin, president and CEO of CCL Industries said, "We have enjoyed a

great relationship with John Dawson, managing director of Pacman-CCL, and his

team since we began the license arrangement in 2009. The two companies share

many common customers, technologies and business partners so this was a logical

next step for both of us. We are especially proud to enter into a new

partnership with Mr. Ali Albwardy as he is clearly one of the most highly

regarded business leaders in this part of the world. The new venture continues

to build on our strategy to invest in the world's emerging markets that are so

important for many of our consumer product customers."

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