The company claims that the proceeds from the sale will fund the continued growth of CCL's higher growth label and container businesses through further acquisitions and technology improvements.
CCL custom manufacturing operates one plant in Canada and three in the US. The division generated sales of Cdn $604.6 million in 2004 and accounted for Cdn $26.6 million of CCL's consolidated operating income.
Once the sale is completed, CCL's annualised revenues will still be in excess of Cdn $1 billion.
"This completes the dramatic transformation of CCL that we started five years ago, with CCL now emerging as a pure specialty packaging company focusing on our high growth Label and Container businesses," said CCL president Donald Lang.
"The divestitures of non-core businesses and the focus on cash flow have enabled us to invest in new technology, upgrade facilities and pursue international growth, creating the largest label converting network in North America, Europe and Asia, and the most innovative aluminium container business.
"This divestiture will significantly improve CCL's balance sheet to support the continuation of the company's growth strategy."
Management believes that this initiative will also help position CCL to achieve valuations for its common shares that are more comparable with its publicly traded Canadian and US speciality packaging peers.
"We anticipate that our first quarter results will significantly out pace the record results reported for the previous fourth quarter," said Lang. "First quarter results will be issued on 5 May 2005 prior to our annual meeting, which is being held the same day."
CCL claims that its custom manufacturing division has also achieved a strong start to the year. The segment's preliminary unaudited results for the first quarter of 2005 indicated sales of approximately Cdn $163.8 million and operating income of approximately Cdn $6.3 million. This compares favourably to the Cdn $149.5 million of sales and Cdn $5.9 million of operating income recorded in the first quarter of 2004 for this business.
The company anticipates that the sale of the division will be completed by the end of May subject to regulatory approval.
CCL Container is North America's leading manufacturer of recyclable aluminium aerosol cans and bottles and is a major supplier of barrier systems. The company has developed both the piston barrier system and ABS "bag-in-can" technology.