Canadian specialty label and packaging manufacturer CCL Industries has signed a binding agreement to buy Treofan America and Trespaphan Mexico Holding from Italian private equity firm M&C.

The purchase price is $255 million, net of cash and assumed debt. The transaction, which remains subject to regulatory approvals and customary conditions, is expected to close in the second quarter.

The entities being acquired represent the Treofan Americas business, namely the production of biaxially oriented PP (BOPP) films, in Canada, the US and Latin America. M&C will continue to control the European business through Treofan Germany and Treofan Italy, which are not part of the deal.

Treofan America operates a 60,000 t/y BOPP film plant in Zacapu, Mexico, and posted sales of around $212 million in 2017, with an (estimated) adjusted EBITDA of $40 million. The company is currently installing another extrusion line at its plant, adding 30,000 t/y of capacity. CCL has agreed to reimburse M&C for all expenditure incurred on the project at closing, on top of the agreed purchase price. Total outlay on the project is estimated to be $65 million.

The deal comes just over a year after CCL bought the UK’s Innovia Films for around $839 million. “The proposed acquisition gives Innovia a solid strategic footprint for BOPP films in both North America and Europe with highly complementary technologies and products,” said CCL’s president and CEO, Geoffrey Martin.

Treofan’s CEO Walter Bickel said proceeds from the sale will be used to deleverage the company and to further develop its production sites in Europe.