Blog Coverage Avery Dennison Acquires Specialty Tapes Manufacturer from PE Firm ShawKwei & Partners

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LONDON, UK / ACCESSWIRE / February 7, 2017 / Active Wall St. blog coverage looks at the headline from label and packaging solutions Company, Avery Dennison (NYSE: AVY) as the firm announced on February 6th, 2017, that it has agreed to acquire Yongle Tape Company Ltd., a manufacturer of specialty tapes and related products used in a variety of industrial markets, including the global automotive industry. Register with us now for your free membership and blog access at:

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One of Avery Dennison’s competitors within the Business Equipment space, HNI Corp. (NYSE: HNI), announced on January 23, 2017, that it will host its quarterly conference call for investors to discuss Q4 and year-end fiscal 2016 results on Thursday, February 09, 2017, at 11:00 a.m. ET. AWS will be initiating a research report on HNI Corp. in the coming days.

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Agreement Details

Yongle Tape will be acquired from the Company’s management and private equity firm ShawKwei & Partners for the purchase price of $190 million. The deal price could increase with additional earn outs of up to $55 million to be paid based on the achievement of certain performance targets over the next two years.

Headquartered in China’s Hebei Province, with production facilities in Zhuozhou and Shanghai, Yongle Tape is China’s leading manufacturer of cable harnessing and insulation tapes. The Company is a key supplier to both Chinese and global automakers, with a portfolio of high-value products that are specified by the automotive OEMs and their Tier suppliers. In 2016, the Company generated revenue of an estimated RMB¥1.1 billion, or approximately $160 million.

“With its well-regarded products and extensive customer relationships, Yongle Tape is an excellent strategic fit with our Company and a strong partner for our growing business in industrial materials,” said Mitch Butier, Avery Dennison’s President and CEO, “this acquisition advances our strategy to expand our global capabilities, while accelerating our growth and increasing our scale in the high-value industrial materials and healthcare segments.”

“Avery Dennison and Yongle Tape share a strong commitment to service and continuous innovation,” said Yongle Tape Chairman Wong Fung, “Avery Dennison brings significant technical and R&D capabilities to this union which will accelerate our product development at Yongle Tape, while its global distribution networks will open new growth opportunities for the Yongle Tape portfolio in Europe and North America.”

The acquisition is expected to close in mid-2017, subject to customary conditions and regulatory approvals. The Company expects the acquisition to have an immaterial impact on earnings per share in 2017. Avery Dennison will fund the acquisition with existing cash and credit facilities.

New Director

On February 02, 2017, Avery Dennison announced that its board of directors has appointed Andres A. Lopez a director, effective February 01, 2017. Lopez, 54, is the President, Chief Executive Officer, and Executive Director of Owens-Illinois, Inc. (OI), the world’s largest glass container manufacturer with $6 billion in revenues and preferred supplier to many food and beverage brands. A native of Colombia, Lopez began his career with Owens-Illinois as a manufacturing engineer. He joined the Company’s executive leadership team in 2004, advancing through a series of financial and operational roles. In 2015, Lopez became President and Chief Operating Officer of the Company and, in 2016, he was named President and CEO. Lopez holds a Bachelor of Science degree in Production Engineering from Colombia’s Universidad EAFIT and completed the Executive Education Program at Stanford University.

Dividend

On February 01, 2017, Avery Dennison’s Board of Directors declared a quarterly cash dividend of $0.41 per share. The dividend is payable March 15, 2017, to shareholders of record on March 01, 2017.

Stock Performance

Avery Dennison’s share price finished yesterday’s trading session at $79.51, slightly up by 0.58%. A total volume of 845.47 thousand shares exchanged hands, which was higher than the 3 months average volume of 785.59 thousand shares. The stock has rallied 13.51% and 28.63% in the last three months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have surged 13.23%. The stock is trading at a PE ratio of 22.48 and has a dividend yield of 2.06%.

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