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."