Paxar acquired for $1.3B by rival
Avery Dennison
By ALEXANDER SOULE
Just months after the exit of its patriarch,
Paxar Corp. agreed to a $1.3 billion takeover by
Avery Dennison Corp., one of its biggest rivals.
Paxar and Avery Dennison sought and received
the blessing of Arthur Hershaft, who retired in
December as chairman of Paxar. Avery Dennison’s
$30.50 per share offer, a 27 percent premium, gave
Hershaft’s Paxar holdings a value of $56 million.
Paxar traces its history to 1918 with the
founding of Meyer Label and Tag Co. in New York
City, which made apparel labels. Leon Hershaft bought
the company in the 1940s, and the Hershaft family
took it public in 1969 under the name Packaging
Systems Corp.
Hershaft’s eldest son, Arthur Hershaft,
was chief executive of Paxar from 1980 to 2001,
and had been a director since 1961. Under his guidance,
the company grew to a work force numbering 12,100
people. Paxar has a relatively small local presence,
with 70 employees split between its White Plains
headquarters and an office in Orangeburg.
In 2000, the company hired Paul Griswold,
who previously led consumer packaging at Pepsi International,
grooming him as Hershaft’s heir apparent. Griswold
resigned less than two years after his promotion
to chief executive officer, however, becoming CEO
of SLI Sylvania Group. The Purchase lighting company
was acquired itself last month by an Indian electrical
systems company.
After Griswold’s departure, Hershaft resumed
his seat in the corner office, and in 2005 the company
hired as CEO former Kimberly-Clark executive Robert
van der Merwe.
In its only full year under Merwe, Paxar
had a $57 million profit on $881 million in revenue,
including proceeds from a $68 million patent settlement
with a California competitor called Zebra Technologies
Corp.
Along with Avery Dennison and Zebra, Paxar
has been racing to develop radio-frequency identification
(RFID) technology, which allows inventory data to
be captured wirelessly from labels as an item is
physically moved inside a facility or vehicle.
In the past five quarters, Avery Dennison
has cut 1,150 jobs; the company’s work force numbers
22,000 people today. Avery Dennison plans to carve
out at least $90 million in savings by in the Paxar
merger, but did not immediately specify where cuts
would fall.
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