Paxar acquired for $1.3B by rival Avery Dennison

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.