Avery Dennison has agreed to sell two units to Canada's CCL Industries… (Carolyn Cole / Los Angeles…)
Avery Dennison Corp. has agreed to sell two of its businesses for $500 million in cash to CCL Industries Inc., a Canadian maker of specialty packaging, the Pasadena company said.
The proposed sale announced Wednesday comes three months after Minnesota-based 3M abandoned its plans to purchase Avery Dennison's office and consumer products unit. The U.S. Department of Justice had opposed that deal because of antitrust concerns.
Now, Toronto-based CCL has agreed to acquire the unit, which had sales of $730 million in 2012. The division's products include Hi-Liters and Marks-A-Lot markers as well as binders. CCL also agreed to acquire Avery's designed and engineered solutions division, which makes pressure-sensitive labels for packaging and posted 2012 sales of $180 million.
"CCL is one of our largest customers, and we have a long-standing relationship with them," said Avery Dennison Chief Executive Dean A. Scarborough. "We are pleased that they will become the steward of the Avery brand for office products."
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The transaction, expected to close this year if approved by regulators, would be CCL's largest acquisition.
"This acquisition has the potential to transform our company at many levels," said Geoffrey Martin, chief executive of CCL.
Avery Dennison on Wednesday also reported fourth-quarter net income of $49 million, or 48 cents a share, up from $22.2 million, or 21 cents, a year earlier. Excluding certain items, earnings were 54 cents a share compared with the 48 cents expected by analysts. Sales rose 5.3% to $1.53 billion.
Avery Dennison shares rose $2.30, or 6.4%, to $38.44.