Avery Dennison Acquires Paxar for $1.3b
Pasadena, Calif.–based tags and labels maker Avery Dennison Corp. has announced an agreement to acquire rival Paxar Corp. of White Plains, N.Y., for $1.3 billion, or $30.50 per share. The deal is expected to close by the end of the year and is subject to approval from Paxar shareholders and federal regulators. Both companies are traded on the New York Stock Exchange.
“This combination is a terrific strategic fit,” said Dean A. Scarborough, president and chief executive officer of Avery Dennison, at a conference call announcing the merger. “This acquisition will allow us to invest in product innovation and services that will serve our existing customers even better.”
Both companies are major players in the growing RFID market, supplying hardware to manufacturers so their retail clients can track inbound shipments.
In addition, the companies provide a variety of hangtags, sizing and care labels as well as heat-transfer products. Avery’s Retail Information Services unit, based in Framingham, Mass., is one of the company’s fastest-growing units.
Paxar supplies similar products with a concentration on security coded tags and RFID products. The company has a stronger European footprint than Avery, and the merger is expected to strengthen the merged company’s presence internationally.
Avery executives said they expect the company to eventually achieve about $90 million to $100 million in annual cost savings, though it expects to spend up to $175 million on various integration costs in the coming year. Company officials noted that there would likely be staff reductions as a result. —Robert McAllister
