Constantia Flexibles has sold its labels division to Multi-Color Corporation for an enterprise value of approximately $1.3 billion. The transaction is expected to be completed in the fourth quarter of 2017, subject to regulatory approvals.
Established in 1916, Cincinnati, OH-based Multi-Color serves the following market segments: healthcare, HPC, food & beverage, specialty (automotive & consumer durables), and wine & spirits. With approximately 5,500 employees, it operates 45 manufacturing facilities worldwide. Multi-Color achieved sales of $923 million in fiscal year 2017.
This value-creating transaction will bring together Constantia Labels’ food and beverage business with Multi-Color’s strong wine and spirits and home and personal care platforms. It will also widen the joint group’s geographical footprint and create long-term synergies that will benefit all parties involved. Mike Henry, current EVP Constantia Labels, will become CEO-elect of Multi-Color, and will work closely with the current CEO Vadis Rodato, who will retire in early 2018 after a transition period. Nigel Vinecombe will remain in his current role as Executive Chairman of Multi-Color. After completion of the transaction, Multi-Color will generate pro forma sales of roughly $1.6 billion and EBITDA of $300 million.
“Following a detailed strategy review, we decided that our top-performing Labels division would be better suited with another partner, which will support its ongoing growth story. At the same time, Constantia Flexibles will participate in the future success story of Multi-Color through its shareholding,” says Alexander Baumgartner, CEO of Constantia Flexibles. “Constantia Flexibles will use proceeds from the transaction to deleverage its balance sheet and enable further acquisitions in the dynamic and consolidating flexible packaging industry. We will also focus on innovative products and services, as well as new technologies to strengthen our existing Food and Pharma divisions.”
Goldman Sachs acted as financial advisor and Willkie Farr & Gallagher LLP as legal advisor to Constantia Flexibles for the transaction.
“The acquisition of Constantia Labels marks a major milestone in the evolution of Multi-Color. We are bringing together complementary talents in markets and geographies, diversifying our business and creating a global leader with a transaction that is financially attractive, which will better help us serve our customers,” says Nigel Vinecombe, Executive Chairman of Multi-Color. “I welcome Mike Henry to the executive team and representatives from Constantia Flexibles to the Board of Directors of Multi-Color.”