CCL Industries To Buy Checkpoint Systems For $443 Mln - Quick Facts

(RTTNews) - CCL Industries Inc. (CCL_A.TO, CCL_B.TO), a Canada-based provider of specialty label and packaging solutions, said it has agreed to acquire Checkpoint Systems, Inc. (CKP) for $10.15 per share, in an all-cash transaction valued at about $443 million, or C$556 million, including net cash.

The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in mid-2016. The transaction will be subject to Checkpoint shareholder approval at a special shareholder meeting expected to take place in the second quarter of 2016.

The acquisition price of $10.15 per share represents a premium of approximately 29 percent to Checkpoint's closing price on March 1, 2016, the last trading day prior to the signing of the definitive merger agreement.

Checkpoint provides technology-driven, loss prevention, inventory management and labeling solutions, including RF and RFID-based, to the retail & apparel industry.

Checkpoint has operations in 29 countries including 46 go-to-market units and 21 manufacturing facilities. For the last twelve months ended September 27, 2015, The company generated net revenue of about C$820 million and adjusted EBITDA before synergies of C$83 million.

CCL Industries noted that the transaction represents a compelling and unique opportunity for it to enhance breadth and scale, while creating an opportunity to realize meaningful synergies, and earnings accretion.

Further, the company noted that the acquisition will expand its international operating platform, especially in Asia. It has identified annual synergies of up to C$40 million.

To achieve the targeted synergies, CCL Industries estimates that non-recurring costs of C$40 million will be incurred between closing and the end of 2018.

Upon the closing of the transaction, Checkpoint will be reported as a new operating segment of CCL.