Cincinnati, Ohio-headquartered global label giant Multi-Color Corp (MCC), is planning to acquire 100% of Hexagon Group from Mercury Capital, subject to FIRB approvals. MCC already operates several sites in Australia, having acquired businesses such as Collotype, Pemara and most recently Herrods in Melbourne. Adding Hexagon brands such as Hally's, Adhesif, Rapid and Kiwi will add around $190 million to annualised sales.
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| MCC is a global operation employing almost 10,000 people. Hexagon will add around 500 more |
Consolidation in Australia and New Zealand's Label industry is set to continue, with the proposed acquisition of the Hexagon Group by Multi-Color Corporation. MCC and Hexagon are both members of the 'Big 5' of regional label producers, as reported in sister publication Labels Online in April. Now it looks like a 'Big 4.'
MCC was privatised in July 2019 when Platinum Equity acquired all its shares and de-listed it from the NASDAQ exchange. Hexagon was formed in 2015 with Mercury Capital rolling up eight label businesses, mostly acquired out of the Geon and Blue Star collapses. Hexagon most recently bought South Australia's Label Partners, driving right into the heart of MCC's core wine label business area.
Label production is increasingly adopting digital and hybrid digital-flexo models with inkjet ruling the roost in hybrid and HP Indigo and Xeikon toner in stand-alone narrow web. However, due to speed, quality, converting choices and huge volumes, flexography and sometimes offset are still dominant. Label printing is bucking the decline in overall print and it estimated to be growing at between 4.5% and 7% per annum, depending on the region.
Smaller, single - digital press micro label businesses are benefitting from their nimbleness by catering for the small-to-medium print runs and variable data content demanded my SME manufacturers, such as craft ales, wines, spirits and organic foodstuffs. It's a great area of print to be involved in, even wide format print 'n cut machines can do labels.
The official MCC-Hexagon announcement follows:
Hexagon in Australia & New Zealand to be acquired by Multi-Color Corporation
Multi-Color Corporation ("MCC") and Hexagon Holdings (“Hexagon”) are today jointly announcing that the parties have signed a binding Sale and Purchase Agreement whereby MCC will acquire 100% of the shares in Hexagon. The acquisition includes Hexagon subsidiaries Hally Labels AU, Label Partners AU, Adhesif Labels NZ, Hally Labels NZ, Kiwi Labels NZ & Rapid Labels NZ.
The transaction will complete when FIRB (AU) & OIO (NZ) foreign investment regulatory approvals have been confirmed, likely in Q3 2021.
Nigel Vinecombe, CEO, Multi-Color Corporation, said, "Bringing these companies together creates an impressive Australasian network and clear market leadership in the region. We are delighted to be welcoming Hexagon’s staff, clients & suppliers to the MCC family.”
Clark Perkins, Chairman, Hexagon Holdings, said, “We are proud to have established Hexagon and built its operations over the past eight years to be the leading manufacturer of self-adhesive labels in Australasia. The MCC and Hexagon businesses are highly complementary, and we can see many opportunities for the combined business in the Australian and New Zealand markets. Today’s announcement is the culmination of the efforts of all of our employees throughout our ownership and we are deeply grateful for their efforts.”
Because the acquisition is by way of a share sale, all existing arrangements with Hexagon employees, clients and suppliers will continue seamlessly.
MCC’s enlarged Australasian group will be led by Daren Hudson, MCC President for Australia and New Zealand. Hexagon CEO Greg Howell will assist across an agreed transitional period.
The companies would like to thank the advisors who have assisted with this transaction. For MCC those include Ernst & Young and Minter Ellison. For Hexagon they are Goldman Sachs, Deloitte and HHL.
About Multi-Color Corporation Cincinnati: Ohio, U.S.A. based Multi-Color Corporation, established in 1916, is a leader in global label solutions supporting a number of the world's most prominent brands including leading producers of home and personal care, wine and spirits, food and beverage, healthcare and specialty consumer products. Multi-Color Corporation serves national and international brand owners in North, Central and South America, Europe, Africa, China, Southeast Asia, Australia and New Zealand with a comprehensive range of the latest label technologies in Pressure Sensitive, IML, Shrink Sleeve, Wraps, Cut and Stack, Heat Transfer, Durables and Aluminum Foils. Multi-Color Corporation employs approximately 10,000 employees across 86 plants in 26 countries.
For additional information on MultiColor Corporation, visit http://www.mcclabel.com.
