Avery Dennison to buy Yongle Tape Co.

Avery Dennison  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 at a or 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.

 

Based in China’s Hebei Province and  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,” according to  Mitch Butier, Avery Dennison president and CEO. Mr. Butier added that the acquisition advances the Avery Dennison's strategy to expand its global capabilities, while accelerating  growth and increasing its scale in the high-value industrial materials and healthcare segments.

 

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.