Sonoco buys Eviosys, Sonoco becomes the world’s leading metal food can and aerosol packaging company.

With the acquisition of Eviosys, Sonoco becomes the world’s leading metal food can and aerosol packaging company.

– Develops Sonoco’s shareholder value creation strategy through disciplined, high-yielding capital investments.

– Approximately $3.9 billion represents 7.3x 2024 adjusted EBITDA, including synergies.

– We expect to achieve more than $100 million in synergies within the first 24 months under the leadership of Rodger Fuller, Chief Operating Officer.

– This acquisition is expected to immediately increase Adjusted EPS and exceed a 25% increase in Adjusted EPS by 2025.

– A transaction that advances the portfolio transformation strategy with at least one execution initiated.

– 1 billion divestment plan, with net proceeds used to reduce the company’s debt.

– With plans to reduce debt to less than 3.0x within 24 months, Sonoco intends to maintain an investment grade credit rating.

As a result of the transaction, Sonoco can focus on and expand its core businesses and invest in high-growth opportunities, both organic and inorganic. As a result of the transaction, Sonoco will become the world’s largest manufacturer of metal food cans and aerosols. Both Eviosys and Sonoco have significant commercial momentum, and the transaction allows Sonoco to partner with customers and lead with innovation.

A major player in the global metal packaging industry, Eviosys is a reliable supplier of various products such as food cans and lids, aerosol cans, metal closures and promotional packaging for multiple consumer brands. With the largest metal food can production presence in the EMEA region, Eviosys employs more than 6,300 professionals in 44 manufacturing facilities in 17 countries. Based on Sonoco’s projections, Eviosys is expected to generate approximately $2.5 billion in revenue and about $430 million in adjusted EBITDA by 2024. With significant commercial and operational progress, Eviosys has achieved a remarkable increase of approximately 50% in EBITDA since 2021.

In integrating Eviosys and Sonoco’s complementary metal can business, Sonoco expects to achieve more than $100 million in synergies. Sonoco Chief Operating Officer Rodger Fuller will oversee the integration, focusing on customer and supplier relationships, employee continuity, operational excellence and maximizing synergies, while combining Sonoco’s culture with Eviosys’ rich history and heritage.

“The addition of Eviosys solidifies our position as a global leader in food can and metal aerosol packaging, an important achievement in our efforts to expand our core strategic metal packaging platform and generate long-term value for Sonoco,” stated Howard Coker, President and CEO. He also highlighted the broad global presence and growing customer base that Eviosys brings to the table, which perfectly complements its existing metal packaging portfolio. Coker added that, with the combined expertise of both companies, they are determined to seize new opportunities in attractive markets, offer customers a stronger value proposition and generate strong returns for shareholders.

“As CEO of Eviosys, I am proud to say that for more than two centuries, we have consistently provided premium metal packaging that elevates the image of our customers’ brands. With our merger with Sonoco, our goal is to expand our reach and introduce our premium, eco-friendly, state-of-the-art packaging options to a broader global customer base. Both organizations are dedicated to providing unparalleled customer support, prioritizing employee safety and maximizing efficiency. I am excited to join forces with the exceptional team at Sonoco as we strive to bring the benefits of this collaboration to all stakeholders involved.”

Benefits from a strategic and financial perspective

It becomes a global leader in our core metal packaging business:

In addition to its acquisition of Ball Metalpack in 2022, Sonoco gains another leadership position in a core business with the acquisition of Eviosys.

By joining Eviosys, a major player in EMEA, Sonoco has significantly expanded its presence in the metal packaging market. This expansion equips Sonoco with the ability to tap into a $25 billion global market. By leveraging Eviosys’ complementary product line, Sonoco aims to enhance its offerings not only to its existing customers but also to prospective customers. In doing so, it will accelerate growth in consumer-focused sectors. With upgraded equipment and strategic locations near key customers, the combined manufacturing facilities are well equipped to improve Sonoco’s operational efficiency.

Clear and actionable synergies are created:

Sonoco has identified more than $100 million in potential synergies from sourcing optimization, supply chain improvements, raw material procurement savings, manufacturing footprint optimization and SG&A simplification. In the first year of ownership, most of the synergies are expected to be realized, with the remainder in the following 12 months.

Strong value creation profile:

According to Sonoco, the transaction will immediately increase adjusted EPS by more than 25% and will increase adjusted EPS by more than 25% by 2025. Sonoco’s EBITDA less capital expenditures is expected to increase by approximately 40% in 2025 after the acquisition as Eviosys generates significant operating cash flow. In the first year of the acquisition, Sonoco expects to receive a return on invested capital in excess of its cost of capital.

The divestitures will advance Sonoco’s portfolio transformation strategy:

The addition of Eviosys marks a significant step in our portfolio transformation strategy, which also involves substantial divestitures. Sonoco plans to sell ThermoSafe, our leading temperature-assured packaging business, and other businesses, with the goal of generating at least $1 billion in revenue over the next twelve to eighteen months. We are confident that these divestitures will provide us with a clearer strategy and improved operational focus, while also funding debt reduction and high-yield investments in our core businesses.

Maintains Sonoco’s investment grade credit profile:

Sonoco is committed to preserving its investment grade credit rating and aligning the financing of the transaction with its strategic priority of maintaining access to capital and a prudent financial policy. This will be achieved through a combination of new debt and an issuance of up to $500 million in equity. To support the transaction, KPS has agreed to invest up to $200 million in Sonoco through the equity offering. The company also anticipates reducing debt through divestitures and cash generation from operations, resulting in net leverage below 3.0x within 24 months of the transaction.

Improve sustainability commitments:

As a combined management team, Sonoco and Eviosys are dedicated to accelerating sustainability initiatives in our communities and environment. In addition to supporting the sustainability needs of Sonoco’s customers, Eviosys also enhances Sonoco’s portfolio of sustainable solutions and offerings across all regions and end markets. Integration efforts will prioritize the integration of sustainability.

Transaction details, financing, timing and approvals

Sonoco has committed financing for the total transaction price of approximately $3.9 billion (€3.615 billion) on a cash and debt free basis.

The Boards of Directors of both companies have unanimously approved the transaction. The transaction is expected to occur by the end of 2024, subject to completion of required consultations with working boards, obtaining regulatory approvals and other customary closing conditions.

Sonoco’s metal packaging business in EMEA will be led by current Eviosys CEO Tomas Lopez.