The sale of European contract packaging business will allow Sonoco to simplify its operating structure, as well as, expand core consumer and industrial packaging businesses
Prairie Industries has agreed to acquire Sonoco’s Europe contract packaging business. (Credit: Adam Radosavljevic from Pixabay)
Contract packaging company Prairie Industries Holdings has agreed to acquire European contract packaging business from Sonoco for $120m in cash.
Sonoco’s European contract packaging business, dubbed Sonoco Poland Packaging Services, offers full-service custom packaging and supply chain management solutions to consumer product goods firms across the globe.
With around 2,600 employees, Sonoco Poland Packaging Services has six contract packaging facilities in three locations and a warehouse facility in Poland. It generated net sales of around $300m in 2019.
Prairie Industries CEO Scott Lamb said: “The team’s outstanding reputation for quality service in Europe, along with a portfolio of world-class facilities, will position the combined business as a global contract packaging leader. We look forward to serving our customers with an enhanced set of capabilities, provided on a global basis.”
Sonoco to use net proceeds to minimise short-term debt and improve liquidity position
Sonoco has divested Europe contract packaging business as part of its strategy to simplify its operating structure and expand its core consumer and industrial packaging businesses.
The company will use the net proceeds from the deal to minimise short-term debt and further enhance its liquidity position.
Subject to normal closing requirements, the deal is expected to be completed in the fourth quarter of this year.
Sonoco president and CEO Howard Coker said: “Since opening our Europe contract packaging business with a single customer 20 years ago, we have built this business to serve some of the best known global consumer product brands supplying consumers in more than 40 countries in Europe, the Middle East, Africa and Asia.”
Rothschild served as financial advisor to Sonoco on the deal, while Haynsworth Sinkler Boyd acted as legal advisor and was supported in Poland by DWF Poland Jamka.
In August this year, Sonoco closed the acquisition of Can Packaging, a French manufacturer of sustainable paper packaging and related manufacturing equipment, for approximately $49m.
Established in 1899, Sonoco offers consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services.