Avery Dennison to buy China's YongLe Tape from Shaw Kwei

YongLe is the name of an acquisition vehicle the PE firm established to acquire Singapore-listed CHT Holdings, working in conjunction with Fung Wong, CHT’s founder and chairman. The deal was worth $66 million, including the repayment of a certain amount of the target company’s outstanding debt. With Shaw Kwei becoming the second-largest shareholder, CHT was privatized and subsequently rebranded as YongLe.

Founded in 1984, YongLe is China’s largest producer of PVC adhesive tape – commonly used for cable harnessing and insulation – supplying a customer base of auto manufacturers, electronics companies and retailers. The company, which also produces a range of other tape products, has two manufacturing facilities in China as well as distribution and warehouse centers in the US and Europe to serve the global automotive industry. Revenue came to approximately RMB1.1 billion ($160 million) last year.

“Chairman Wong and the management team have built an outstanding business servicing leading customers around the world,” said Kyle Shaw, managing partner at Shaw Kwei, in a statement. “It has been a rewarding journey the past several years participating with them in the development of YongLe Tape into a leading pressure-sensitive wire harnessing tape manufacturer.”

Wong added that Avery Dennison’s technical and R&D capabilities would accelerate the company’s product development, while its global distribution networks would open up new growth opportunities in Europe and North America. For Avery Dennison, the acquisition is a means of furthering its global footprint and increasing scale in the high-value industrial materials and healthcare segments.

US-listed Avery Dennison produces display graphics, labeling and packaging materials for industries ranging from apparel and automotive to consumer goods and healthcare. It has more than 175 manufacturing and distribution facilities and in excess of 25,000 employees in over 50 countries. The company posted sales of $5.97 billion in 2015 – with 32% of revenue coming from Asia – and net income of $274.3 million.

The acquisition is expected to close in mid-2017, subject to regulatory approvals. The earn-outs are conditional on YongLe achieving certain performance targets over the next two years.

Shaw Kwei invests in middle-market companies with operations in Asia, chiefly in the industrial, manufacturing and services sectors. YongLe is one of three portfolio companies – alongside Beyonics and Chosen, which were merged last year – acquired through privatizations in Singapore.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Trade sale
• Industrials
• China
• Shaw Kwei & Partners
• Exit