Avery Dennison Corporation · NYSE:AVY
Avery Dennison — Merger or Acquisition (March 2007)
17 slides from Avery Dennison's merger presentation, Mar 23, 2007
Slide 1: A Perfect Fit
1 A Perfect Fit Investor Presentation Dean Scarborough March 23, 2007 Rob van der Merwe President & CEO Chairman, President & CEO
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements about Avery Dennison's anticipated acquisition of Paxar and statements about projected f
Slide 3: Transaction Overview
3 Transaction Overview $30.50 per Paxar share, a 27% premium to closing price on 3/22/07 $1.34 billion Enterprise Value, including $5 million of debt (net of cash) 14.2x adjusted 2006 EBITDA* before cost synergies 6.9 - 7.3x adjusted 2006 EBITDA* after cost synergies Substantial value creation throu
Slide 4: Market Overview
4 Market Overview Global retail information and brand identification market estimated to represent over $15 billion in annual revenue, including: All varieties of tags and labels, branded packaging, and printers for exterior and interior labeling Tags and labels for softgoods (e.g., linens) and foot
Slide 5: Products, Solutions, and Services
5 Products, Solutions, and Services Variable Data Labels and Tags Brand Promotion and Merchandising Tags Woven and Printed Fabric Labels Brand Protection and Security Products In-Plant Printers, Accessories and Supplies Bar Code and RFID Printers Handheld Labelers; Labels and Tag Fasteners Informati
Slide 6: Customers
6 Customers Our products support … but > 20,000 factories top US/EU retailers actually purchase our and brands… products
Slide 7: Multi-Tier Supply Chain
7 Multi-Tier Supply Chain TIER 1 Retailers / Brand Owners TIER 2 Buying Offices / Agents / Importers TIER 3 Vendors / Factories / Contractors
Slide 8: Each Tier Has Different Priorities
8 Each Tier Has Different Priorities Tier 1 Retailer Front-end creative design services graphic design services and product/program development Retailer Controlled Outsourced Tier 2 Buying Office/ Domestic Real-time electronic communication Agent Importer advanced information management systems link
Slide 9: Key Success Factors
9 Key Success Factors Speed and responsiveness Quality and global consistency “Close to the needle” New products and services
Slide 10: Strategic Rationale: Enhances Revenue Growth Potential
10 Strategic Rationale: (1) Enhances Revenue Growth Potential Expands capabilities with above-average growth opportunity Increases our presence in the expanding retail information and brand identification market, more than doubling revenues to over $1.5 billion Creates a leader in $15 billion-plus,
Slide 11: Strategic Rationale: Enhances Revenue Growth Potential (cont'd)
11 Strategic Rationale: (1) Enhances Revenue Growth Potential (cont’d) Combines complementary strengths Improves access to European retailers and brand owners Relative geographic strength at factory level is highly complementary – Avery Dennison strong in Asia; Paxar strong in Europe/Middle East/Afr
Slide 12: Strategic Rationale: Estimated $90 To $100M of Annualized Cost Synergies
12 Strategic Rationale: (2) Estimated $90 To $100M of Annualized Cost Synergies Similar infrastructure – areas of overlap include SG&A (e.g., corporate overhead, back office support) and production High degree of visibility on sources of synergy – expect to achieve substantially all of the targeted
Slide 13: Combining Complementary Strengths Will Better Serve Customer Needs
13 Combining Complementary Strengths Will Better Serve Customer Needs Broader product line and improved service capabilities – implement “best of breed” to benefit both manufacturers and the retailers/brand owners they supply Faster delivery times on new brand designs and products Quicker access to
Slide 14: Financial Summary
14 Financial Summary Key factors underlying financial targets: $90 to $100 mil. in annualized cost synergies realized within 24 months following close of transaction Estimated $70 to $80 mil. of incremental annual interest expense during first 36 months following close Estimated $15 mil. incremental
Slide 15: Sources of Value Creation
15 Sources of Value Creation Good premium paid to Paxar shareholders Good value creation for Avery Dennison shareholders: Enhances top-line growth potential Substantial cost synergies High degree of visibility to potential savings Proven track record with acquisition integration on global scale… hig
Slide 16: Appendix
16 APPENDIX
Slide 17: 2006 Adjusted Paxar EBITDA
17 2006 Adjusted Paxar EBITDA