Chinese manufacturer of high-value industrial tapes is key
supplier to global automotive industry
GLENDALE, Calif.--(BUSINESS WIRE)--Feb. 6, 2017--
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170206005312/en/
Source: Avery Dennison
Avery Dennison Media Contact
Rob Six, +1 626 304-2361
rob.six@averydennison.com
or
Avery
Dennison Investor Relations
Garrett Gabel, +1 626 304-2399
investorcom@averydennison.com
or
Yongle
Tape Company Ltd., Media Contact
H+K Strategies, Shanghai
Peipei
Cai
(W) +86 21 2287 1777
(M) +86 158 2121 3214
peipei.cai@hkstrategies.com
or
ShawKwei
& Partners Media Contact
Richard Barton/Dan Billings -
Newgate Communications
+852 3758 2680
richard.barton@newgate.asia
dan.billings@newgate.asia
