CCL Industries’ acquisition of Checkpoint gets thumbs up at Industrial Alliance

Industrial Alliance Securities analyst Neil Lindsell says he likes CCL Industries’ (CCL Industries Stock Quote, Chart, News: TSX:CCL.B) acquisition of Checkpoint Systems.

Yesterday, CCL announced that it would acquire New Jersey-based Checkpoint Systems Inc. for $10.15 (U.S.) per share in an all-cash transaction valued at approximately $556-million. Checkpoint is a provider of merchandise security for the retail industry.

“We have admired Checkpoint for many years as they built a unique, leading global position providing technology-driven label solutions to the retail and apparel industry,” said CCL CEO Geoffrey T. Martin. “We are very pleased to welcome their deeply experienced people to CCL where they will continue to focus on this important industry for emerging smart label technologies.”

Lindsell says Checkpoint’s expertise in the RF and RFID space will introduce new vertical markets to CCL, and brings with it a new blue-chip customer base.

“The acquisition presents CCL with a unique opportunity to leverage its expertise and capabilities yet again in cost cutting, realizing efficiencies, and manufacturing, which will enable the Company to unlock significant potential synergies as it has in previous acquisitions,” says Lindsell.

In a research update to clients today, Lindsell maintained his “Buy” rating but raised his one-year price target on the stock from $240.00 to $250.00, implying a return of 7.6 per cent at the time of publication (including dividend).