The acquisition is expected to help Sonoco expand its customer production capacity and convert operations throughout Europe and neighbouring areas
Sonoco to acquire Denmark-based privately owned paper manufacturer Skjern. (Credit: Kelly Sikkema on Unsplash)
Paperboard container maker Sonoco has entered into a definitive agreement to acquire Denmark-based privately owned paper manufacturer Skjern for $88m in cash.
The acquisition will help Sonoco expand its customer production capacity and convert operations throughout Europe and neighbouring areas.
Sonoco said the buyout was unanimously approved by its board of directors. Expected to be completed in the fourth quarter of 2022, the deal is subject to customary closing conditions.
Established in 1965, Skjern produces high-grade paperboard made entirely from recycled paper for rigid paper containers, tubes, cores, and other uses.
The firm has established strong environmental initiatives for reducing CO2 emissions and utilising renewable energy sources.
Its operations are fuelled by a biomass boiler, which lessens its dependency on natural gas.
Skjern is anticipated to reach $50m in annual revenues in 2022, and it is anticipated that the deal would instantly increase profits per share and cash flow.
Sonoco president and CEO Howard Coker said: “This acquisition builds on Sonoco’s previously articulated strategy to invest in our core businesses while capitalizing on the growing market for sustainable paper and packaging products in Europe.
“Skjern has a strong reputation for high-quality output from efficient and low emission operations, which aligns well with Sonoco’s overall commitment to a circular economy and the reduction of greenhouse gases.”
Coker added: “With this acquisition, Sonoco is better positioned to be a trusted provider to new and existing customers and to further accelerate organic growth in Europe. We warmly welcome the Skjern team to the Sonoco family.”
According to Sonoco, Skjern’s high-quality product from effective and low-emission operations complements its aim of lowering greenhouse gas emissions.
The acquisition is in line with the packaging firm’s goal to develop in Europe’s growing market for sustainable paper and packaging goods while investing in its core operations.
In April this year, the firm acquired the remaining one-third interest in its Brazilian flexible packaging joint venture, Sonoco do Brasil Participacoes.