Multi-Color completes Constantia buy

Max Goldbart
Wednesday, November 1, 2017

US-headquartered global label giant Multi-Color Corporation has completed its acquisition of Constantia Flexibles’ Labels division.

The $1.15bn (£860m) deal, which was first announced in July, became official on 31 October and has now been cleared by all required regulatory authorities, with Constantia Flexibles receiving $965m in cash plus a 16.6% shareholding of Nasdaq-listed Multi-Color’s outstanding shares.

Constantia said the transaction, which has created a circa-$1.7bn group with $300m EBITDA, brings together the high-performing food and beverage business of Constantia Labels with Multi-Color’s wine and spirit and home and personal care platforms, as well as its emerging global position in healthcare.

Constantia Flexibles chief executive Alexander Baumgartner thanked staff for their contribution to the group and wished them a “successful future”. He said the proceeds from the transaction would be used to de-leverage Constantia Flexibles’ balance sheet and enable further flexible packaging acquisitions.

Constantia Flexibles head of group communications Daniel Smith told PrintWeek: "We are happy that the Labels division has found a strategic home that will further develop its success story. The portfolios of Multi-Color Corporation and Labels complement each other nicely and the reach of the group is global."       

Constantia Flexibles’ majority shareholder Wendel’s executive board member Bernard Gautier said the deal recognised the strategic value and quality of the labels division and also “gives the company an indirect leadership position in the label industry as the largest shareholder of Multi-Color”.

Labels operates 23 sites across 14 countries, employing circa 2,800 staff and generating sales of €605m (£530m) last year, around a third of Flexibles overall turnover. Its UK operation includes 170-staff Spear Europe, which in its most recent accounts had sales of £57m.

Multi-Color has worldwide sales of $923m and operates 45 factories across the globe with a 5,500-strong workforce. Its UK operation includes sites in Daventry and Scotland, including John Watson & Co in Glasgow, which it acquired in 2013. Its UK operations have combined sales of £42m, not including its three sites in Ireland. 

Upon completion, two representatives of Constantia Flexibles will join the Multi-Color board and Mike Henry, executive vice-president of Constantia Labels, will become chief executive officer of Multi-Color in January 2018, when the outgoing Vadis Rodato retires. Nigel Vinecombe will remain executive chairman of Multi-Color.

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