Global material science company, Avery Dennison, has announced a definitive agreement to acquire Smartrac’s Transponder (RFID Inlay) division, for the purchase price of €225 million. The division develops RFID products, with 2019 estimated global revenue of approximately €125 million, or approximately $140 million, and approximately 900 employees.

The combination creates a platform with over $450 million in revenue offering long-term growth and profitability above the company average, with strong research and development capabilities, expanded product lines, and added manufacturing capacity, according to Avery Dennison.

The acquisition is expected to have an immaterial impact to the company’s adjusted earnings per share in 2020. Avery Dennison plans to fund the acquisition with existing cash and credit facilities, and expects the transaction to close in a few months, subject to customary closing conditions and approvals.

“This acquisition reflects a continuation of our strategy to invest, both organically and through M&A, to shift our portfolio towards faster growing, higher value categories. Smartrac’s transponder division represents an excellent strategic fit for us, accelerating our strategy to expand our intelligent labels platform across a variety of end markets and customers within the industrial and retail segments, and extending our reach to new channels,” Mitch Butier, Avery Dennison chairman, president, and CEO said.

“We believe in a future where every physical item will have a unique digital identity and digital life, which will transform the visibility of products throughout the supply chain, all the way to the consumer, helping to improve efficiencies, increase sustainability, and enhance consumer experience. The capabilities of Smartrac will enable us to continue delivering on this vision across multiple verticals,” Francisco Melo, vice president and general manager, intelligent labels for Avery Dennison said.

“Our RFID transponder business is among the pioneers in the RFID industry, having built a very attractive product portfolio across a broad variety of customer needs and frequencies. The combination with Avery Dennison will help us to continue driving innovation that benefits our customers and the overall industry,” Smartrac’s CEO and chairman of the management board, Christian Uhl said.

Fibre2Fashion News Desk (GK)

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