HOT OFF THE PRESS: John Watson said no break fees were needed in the deal being cancelled. Picture: Martin Shields
The proposed multimillion- pound sale to Canadian giant CCL was first mooted in November last year as initial terms had been struck.
There was a year-long handover period built into that with full completion expected to be formalised early in 2014.
Glasgow-based John Watson & Company, which employs around 80 people, can trace its roots back almost two centuries and in recent years has benefited from its niche in printing labels for the Scotch whisky and Irish whiskey sector.
However, it has been confirmed both sides have walked away from the agreement.
John Watson, the fifth-generation of his family to work in the business, said: "We'd rather it had gone to full term but we decided it wasn't for us.
"Once you start doing due diligence and all the rest of it we realised it wasn't right for us.
"It was very flattering to be invited to the top table of global printers. CCL wanted to make us a centre of excellence in Scotland.
"At the end of the day if you can't agree terms then you don't have a deal."
CCL, which is listed on the Toronto Stock Exchange and employs 6600 people at more than 70 locations around the world, indicated it would continue to serve the Scottish spirits industry from sites at East Kilbride and Castleford, West Yorkshire.
Mr Watson said there were no break fees involved in the deal being cancelled and the company is not actively looking for a buyer.
He said: "Both parties parted very correctly and [in a] gentlemanly [fashion].
"We have never put the company on the market and it is not on [now].
"It was just CCL approached us and it was exciting. CCL has something like $2.2 billion (£1.5bn) revenue so it was almost like Miss World wanting to take you out."
CCL had indicated it would invest in the John Watson & Co business to make it a centre of excellence in Scotland as part of its global wine and spirits unit.
Mr Watson said his business was continuing to do well in a tough sector thanks to a strong customer base and investing in new technology.
He added: "The printing industry is a high-risk business to be in. Always felt like walking on a tightrope as tremendous pressure on margins and prices with competition at home and abroad.
"We will continue with our investment plans. We had a big one of £2.2 million in pressure sensitive label equipment and it is going very well.
"Our financial year is up on March 31 and it is sure to be our best ever year to date. We are in a good place."
In the year to March 31, 2012, John Watson & Company increased its turnover by 19.8% to £11.6m while pre-tax profits rose from £204,830 to £278,070.
Mr Watson's sons Angus and Sandy are the sixth generation of the family to have worked in the business.
Contextual targeting label: