US-based packaging firm Sonoco has agreed to acquire recycled paperboard manufacturer Corenso Holdings America (CHA) in a deal worth approximately $110m in cash.
Image: Sonoco expects the acquisition of CHA to expand its sustainable paperboard and core converting operations. Photo: Image by rawpixel from Pixabay.
Under the terms of the agreement, Sonoco will acquire CHA from a company owned by investment funds advised by private equity investment firm Madison Dearborn Partners and management.
CHA is engaged in manufacturing uncoated recycled paperboard (URB) and high-performance cores used in the paper, packaging films, tape, and specialty industries.
The firm operates a 108,000-ton per year uncoated recycled paperboard mill in Wisconsin Rapids, Wisconsin, as well as two core converting facilities in Wisconsin Rapids and Richmond, Virginia. It employs 175 people at the two locations. CHA reported net sales of approximately $75m in 2018.
Sonoco expects the acquisition to expand its sustainable paperboard and core converting operations.
Sonoco president and CEO Rob Tiede said: “The acquisition of Corenso Holdings America creates a long-term opportunity for Sonoco as CHA operates a best-in-class uncoated recycled paperboard mill that is capable of producing a wide variety of coreboard grades, in addition to providing attractive core converting assets and long-term partnerships with customers.
“Along with its attractive assets and customer mix, 100 percent of Corenso Holdings America products are made from recycled raw materials, which further enhances Sonoco’s sustainability commitment to increase by weight the amount we recycle or cause to be recycled up to 85 percent relative to the volume of products we put into the global marketplace by 2025.”
Subject to normal regulatory review, the transaction is scheduled to be completed in the third quarter of 2019.
Upon completion of the deal, CHA’s financial results are planned to be reported within Sonoco’s Paper/Industrial Converted Products segment.
Sonoco is engaged in providing a variety of consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services.
Recently, Cascades Sonoco, a joint venture of Cascades and Sonoco Products Company, has opened an expanded facility in Birmingham, Alabama, US.
The expanded facility will be used for the production of water-based functional coating solution to create recyclable, repulpable and compostable containers.