William Blair Reiterates Outperform Rating on Multi-Color Corp. (LABL)

William Blair & Company is out with a research report this morning, where it reiterates its Outperform rating on shares of Multi-Color Corporation

; it did not provide a price target. The WB analysts said, “Multi-Color announced at market close Tuesday that it has entered into an agreement to acquire Italian-based wine, spirits, and olive oil label specialist Guidotti Centro Stampa SPA (“Guidotti”) for approximately €50.5 million in cash and stock. We view this acquisition as an important step in Multi-Color’s global expansion, as it provides the company with a presence in Europe—the largest wine production market in the world by far.” They noted, “Although the Collotype division already has a strong position in the New World wine production markets of the U.S., Australia, and South Africa, these markets comprise less than 20% of global wine production. The addition of Guidotti provides Collotype with entry into the much larger European wine production markets: Guidotti supplies to Italy, France, and Spain, as well as to the U.K. and Eastern European markets, which are more spirits-centric. Guidotti’s footprint overlaps the major production regions for olive oil as well. We anticipate that expanding to Europe may also provide opportunities for revenue synergy with existing Collotype customers that ship wine in bulk to be bottled in Europe.” They closed by saying, “With the acquisition of Guidotti, the company is expanding its presence in the higher-margin wine and spirits segment. In addition, we believe that with the cost rationalization undertaken and an improving demand outlook, the company should deliver strong incremental profit when growth resumes. At 5.3 times enterprise value to our fiscal 2011 (pre-acquisition) EBITDA estimate and 8.5 times our 2011 earnings estimate, we view shares of Multi-Color as attractively valued and recommend purchase.”