The acquisition, which was announced in November last year, is expected to further enhance and expand Sonoco's 100% recycled fibre-based packaging solutions
Sonoco snaps up remaining stake in RTS Packaging. (Credit: Rock Staar on Unsplash)
US-based Sonoco Products Company has completed the acquisition of the remaining equity interest in RTS Packaging from WestRock, its American joint venture partner.
Under the deal, the packaging company purchased the remaining stake and one WestRock paper mill in Chattanooga, Tennessee, US.
The acquisition’s purchase price was $330m, subject to customary price adjustments.
The acquisition, which was announced in November last year, is expected to further enhance and expand Sonoco’s 100% recycled fibre-based packaging solutions.
The deal will help Sonoco to better serve the growing consumer wine, spirits, food, cosmetics, and healthcare markets.
In addition, WestRock’s Tennessee mill, which supplies RTS with uncoated recycled paperboard (URB), will be strategically merged into the Sonoco Products Company portfolio.
Sonoco owned 35% of the shares in the joint venture with WestRock before the completion of this transaction.
With this deal, the packaging company expanded its network of 15 operations and 1,100 employees in the US, Mexico, and South America.
The company used cash on hand and borrowings from its current credit arrangements to pay for the acquisition.
Sonoco’s net debt to adjusted EBITDA ratio is less than 2.9x following the transaction.
The acquisition is anticipated to instantly increase earnings per share, excluding the effects of purchase accounting adjustments.
Established in 1899, the packaging firm has around 22,000 employees working in over 310 operations around the world.