A HI-LITER or Marks-A-Lot pen may not be used to ink the deal, but Avery Dennison, which produces the two popular brands, has agreed to sell its Office and Consumer Products (OCP) business to 3M. The $550 million cash deal gives 3M – whose own office and consumer products include such well-known brands as Post-it notes and Scotch tape – an opportunity to expand its scale in that sector. Avery Dennison’s OCP sales for 2011 are estimated to be $765 million.
Adding Avery Dennison’s OCP unit also widens 3M’s global footprint in office, education, and consumer products. In 2010 international operations made up about 68% of the sales for Avery Dennison, which had expanded in Asia, Latin America, and Eastern Europe that year. 3M also stretched itself globally in its consumer and office business in 2010 with such acquisitions as its majority stake in Japanese company A-One, the top office and consumer label brand in Asia and second-largest in international markets.
For Avery Dennison, the sale of its OCP business will allow it to pay down debt, make additional pension contributions, and buy back its own shares. Following the transaction, it plans to focus on its pressure-sensitive materials and retail branding and information solutions businesses.
The deal is expected to close in the second half of 2012.