Avery Dennison to acquire Meridian’s flooring adhesives business for $390m

MENTOR, Ohio - Avery Dennison Corporation (NYSE:AVY), a $13.7 billion market cap company with a solid financial health rating according to InvestingPro, announced Monday it has signed a definitive agreement to acquire Meridian Adhesives Group’s U.S.-based flooring adhesives business for $390 million, subject to customary closing adjustments.

The Meridian business, headquartered in Dalton, Georgia, is a developer and manufacturer of specialty adhesives and coatings for the U.S. flooring industry. The operation includes four manufacturing facilities across the United States and employs approximately 110 people. The business is projected to generate approximately $110 million in revenue in 2025, adding to Avery Dennison’s current annual revenue of $8.7 billion. InvestingPro data shows the company maintains strong profitability with a 28.6% gross margin.

Upon completion, the acquired business, which includes the Taylor Adhesives, Polycom and Frontier Products brands, will be integrated into Avery Dennison’s Materials Group.

"This acquisition will leverage our materials science capabilities, while deepening our specialty adhesives solutions," said Deon Stander, Avery Dennison president and CEO, in the press release statement.

Ryan Yost, president of Avery Dennison Materials Group, noted the acquisition "adds a valuable set of application-oriented solutions in high-value categories to our adhesives portfolio."

The transaction is expected to close in the fourth quarter of 2025 and is not anticipated to materially impact Avery Dennison’s adjusted earnings per share this year.

Avery Dennison, a global materials science and digital identification solutions company, reported sales of $8.8 billion in 2024 and employs approximately 35,000 people across more than 50 countries. The company has maintained dividend payments for 55 consecutive years, currently offering a 2.1% yield. Trading at a P/E ratio of 19.7, InvestingPro analysis suggests the stock is currently fairly valued. For deeper insights into AVY’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Chemlink Partners, LLC and Goodwin Procter LLP advised Avery Dennison on the transaction, while Piper Sandler, Moelis & Company, and Weil, Gotshal & Manges LLP advised Meridian.

In other recent news, Avery Dennison reported its second-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $2.42, which surpassed analyst expectations of $2.39. However, the company fell short of its revenue forecast, reporting $2.22 billion compared to the expected $2.24 billion. Citi responded to the earnings report by raising its price target for Avery Dennison to $191, citing solid second-quarter results and a slightly better-than-feared third-quarter outlook, while maintaining a Neutral rating. Meanwhile, BMO Capital lowered its price target to $207 from $216, noting the company’s resilience in higher-margin businesses like Vestcom and Graphics/Reflectives despite challenges in the apparel sector.

Additionally, Avery Dennison announced a quarterly cash dividend of $0.94 per share, payable on September 17, 2025, to shareholders of record as of September 3, 2025. The company also appointed David Flitman, CEO of US Foods Holding Corporation, to its board of directors, effective July 23, 2025. Flitman’s extensive executive experience includes leadership roles at Builders Firstsource Incorporated and BMC Stock Holdings Incorporated. These developments highlight Avery Dennison’s strategic adjustments and ongoing efforts to navigate a challenging market environment.

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