Avery Dennison Corporation announced a definitive agreement to acquire Smartrac Technology Group's Transponder (RFID Inlay) Division, for the purchase price of €225 million, subject to certain closing and post-closing adjustments. The division is a leader in the development and manufacture of RFID products, with 2019 estimated global revenue of approximately €125 million, or approximately $140 million, and approximately 900 employees.

Headquartered in Glendale, CA, Avery Dennison specializes in the design and manufacture of a wide variety of labeling and functional materials. Its products include pressure-sensitive materials for labels and graphic applications; tapes and other bonding solutions for industrial, medical and retail applications; tags, labels and embellishments for apparel; and RFID solutions serving retail apparel and other markets.

Smartrac's RFID inlay and tags business will complement Avery Dennison’s Intelligent Labels platform, expand its existing product portfolio, enhance the company’s R&D, manufacturing and sales capacity and increase its RFID offerings for a broad variety of customer requirements and applications. The transaction will also provide the opportunity to expand market coverage and to accelerate RFID growth opportunities.

“This acquisition reflects a continuation of our strategy to invest, both organically and through M&A, to shift our portfolio towards faster growing, higher value categories,” said Mitch Butier, Avery Dennison chairman, president and CEO. “Smartrac’s Transponder Division represents an excellent strategic fit for us, accelerating our strategy to expand our Intelligent Labels platform across a variety of end markets and customers within the industrial and retail segments, and extending our reach to new channels."

The combination creates a platform with over $450 million in revenue offering long-term growth and profitability above the company average, with strong research and development capabilities, expanded product lines, and added manufacturing capacity.

“What we are announcing today is a big change in Smartrac's history. Our people and capabilities are very complementary to Avery Dennison, hence offer a perfect basis to expand market success. We are convinced that our RFID inlays and tags business will face a bright future as part of Avery Dennison’s Intelligent Labels business, which is set to thrive on the rise of the Internet of Things and the growing customer demand for connected products. At the same time, our successful Solutions Business Division will continue to independently build on its offerings supporting the digital transformation,” said Christian Uhl, CEO and Chairman of the Management Board at Smartrac.

“We believe in a future where every physical item will have a unique digital identity and digital life, which will transform the visibility of products throughout the supply chain, all the way to the consumer, helping to improve efficiencies, increase sustainability, and enhance consumer experience,” said Francisco Melo, VP and GM, intelligent labels for Avery Dennison. “The capabilities of Smartrac will enable us to accelerate our strategy and deliver on this vision across multiple verticals.”

As part of the transaction, Avery Dennison will acquire Smartrac’s Transponder business and associated assets, including all manufacturing, R&D, sales and administration facilities, and will take over all affected employees. Avery Dennison will also assume all contractual obligations to employees, customers and suppliers. The acquisition is subject to regulatory approvals and other customary closing conditions.