Canadian beverage labeling giant CCL Industries has pulled out of a deal to acquire John Watson & Co., a Scottish producer of labels for Scotch whisky and other spirits.
The deal was announced on November 20, and been slated for completion in early 2014, with CCL planning to integrate John Watson & Co within its CCL Label division, which comprises circa. 83% of its sales.
But Toronto-based CCL (CAD $1.2bn or US $1.19bn 2011) said that the parties were unable to reach an agreement on contractual terms, and thus jointly agreed to end further discussions.
CCL estimated John Watson’s turnover at around £12m ($16.2m) in 2012, and said last November that the acquisition would complement its wine and spirits labeling operations in Australia, Asia, Latin America, Russia, South Africa, the US and UK.
Geoffrey Martin, president and CEO of CCL Industries, said at the time: “The wine and spirits sector continues to be attractive for us as we have built our business by a series of acquisitions, joint ventures and greenfield investments around the world.”
Co-operation phase over...
Announcing plans – subject to the takeover going through – to invest further in John Watson’s operations in Glasgow, where the firm has a 40,000 square foot facility, Martin said CCL would co-operate with the former to serve common customers in the run-up to early 2014.
This ‘coordination’ period was being led by Guenther Birkner, president, Food & Beverage Worldwide, CCL Industries, and the fact that it was even being talked about makes the breakdown of the deal even more surprising.
“Guenther and his key people have help John Watson & Co. in high regard for a long time and believe the great team that John assembled will allow us to get closer to important global customers located in Scotland,” Martin said.
CCL Label’s operations in the UK comprise spirits labeling sites in East Kilbride and Castleford.
CCL Industries CFO, Sean Washchuk, referred us to CEO Geoffrey Martin, when asked about the breakdown of the deal, but Martin was not immediately unavailable for comment.
A spokeswoman for John Watson & Co told BeverageDaily.com this morning that the only person who could comment was company chair John Watson, but that he was unavailable.
Founded in 1824, John Watson & Co. describes itself as the oldest printing company in Scotland.