Avery Dennison to Acquire Yongle Tape Company Ltd.
06 February 2017 - 7:01PM
Business Wire
Chinese manufacturer of high-value
industrial tapes is key supplier to global automotive
industry
Avery Dennison (NYSE:AVY) today announced 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. Yongle Tape will be
acquired from the company’s management and private equity firm
ShawKwei & Partners for the purchase price of $190 million,
subject to customary adjustments, with additional earnouts 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.
Over its 32-year history, Yongle Tape has built its strong
market position with high quality products, competitive pricing,
and regular investment in product innovation. Last year, 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 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.”
“Yongle Tape will build on our position in the global automotive
sector and strengthen our overall product offerings with a range of
industrial customers,” added Mike Johansen, vice president and
general manager of Avery Dennison’s Industrial and Healthcare
Materials businesses. “And with its solid foundation and strong
legacy of growth, Yongle Tape will be an excellent fit with our
global tapes and fastener businesses—we see many attractive
opportunities to innovate and expand the existing product range and
customer base of both organizations.”
“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.”
“Chairman Wong and the management team have built an outstanding
business servicing leading customers around the world,” said Kyle
Shaw, a director of Yongle Tape and the Managing Partner of
ShawKwei & Partners. “It has been a rewarding journey the past
several years participating with them in the development of Yongle
Tape into a leading pressure-sensitive wire harnessing tape
manufacturer.”
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.
About Avery Dennison
Avery Dennison (NYSE: AVY) is a global leader in
pressure-sensitive and functional materials and labeling solutions
for the retail apparel market. The company’s applications and
technologies are an integral part of products used in every major
industry. With operations in more than 50 countries and more than
25,000 employees worldwide, Avery Dennison serves customers in the
consumer packaging, graphical display, logistics, apparel,
industrial and healthcare industries. Headquartered in Glendale,
California, the company reported sales of $6.1 billion in 2016.
Learn more at www.averydennison.com.
About Yongle Tape Company Ltd.
Yongle Tape is one of the world’s largest PVC tape manufacturers
and one-stop producer of polymeric plasticizer, PVC film,
pressure-sensitive adhesive materials and tapes. Its products are
widely used in automotive, electrical and communication industries
across 70 countries and regions around the globe. The company is a
leading supplier to many high-profile international enterprises.
Founded in 1985, Yongle Tape has rapidly expanded over the past 30
years and now has more than 1,200 employees and two world-class
advanced plants in Zhuozhou, Hebei Province and Songjiang District,
Shanghai, respectively. In fiscal year 2016, Yongle Tape reported
total revenues of over one billion RMB. Learn more about the
company at http://en.yongletape.com.
About ShawKwei and Partners
ShawKwei & Partners is a private equity fund manager with
offices in Hong Kong and Singapore investing in mid-market,
high-value added industrial and service companies operating across
Asia with company valuations up to US$500 million. After investing,
ShawKwei & Partners helps companies to build their business,
acquire other companies, and raise capital from banks as well as
initial public offerings. ShawKwei & Partners builds better
businesses by partnering with management to identify and realize
sustainable performance improvements in areas such as sales growth,
margin expansion, and capital efficiency. Kyle Shaw established
ShawKwei & Partners in 1999, and he is a pioneer in Asian
private equity having managed Asian investment portfolios since
1990 with Security Pacific National Bank and then the Tudor
Investment Group.
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version on businesswire.com: http://www.businesswire.com/news/home/20170206005312/en/
Avery Dennison Media ContactRob Six, +1 626
304-2361rob.six@averydennison.comorAvery Dennison Investor
RelationsGarrett Gabel, +1 626
304-2399investorcom@averydennison.comorYongle Tape Company Ltd.,
Media ContactH+K Strategies, ShanghaiPeipei Cai(W) +86 21 2287
1777(M) +86 158 2121 3214peipei.cai@hkstrategies.comorShawKwei
& Partners Media ContactRichard Barton/Dan Billings -
Newgate Communications+852 3758
2680richard.barton@newgate.asiadan.billings@newgate.asia
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