KPS Capital Partners offloads metal packaging business to Sonoco Products Company

26 Jun 2024 --- KPS Capital Partners has entered into an agreement to sell its portfolio company, Eviosys, to Sonoco Products Company, a US-based global sustainable packaging specialist, for €3.6 billion (approximately US$3.9 billion). 

Eviosys is a global supplier of metal packaging, producing food cans and ends, aerosol cans, metal closures and promotional packaging for various consumer brands.

“For over 200 years, Eviosys and its predecessor companies have provided best-in-class metal packaging that enhances the appeal of our customers’ brands. KPS recognized the investment opportunity and upside presented by Eviosys,” says Tomás López, CEO of Eviosys.

“KPS’ extensive manufacturing expertise and experience provided us with the plan and resources that resulted in enormous value creation.”

Sonoco has the option, under certain circumstances, to pay up to US$200 million of the purchase consideration in the form of Sonoco stock. The transaction is expected to close by the end of 2024, and is subject to completion of required works council consultations and the receipt of required regulatory approvals and other customary closing conditions.

Complex carve-out transaction
KPS created Eviosys to acquire Crown Holdings’s EMEA Food and Consumer Packaging Business in August 2021 in a “highly complex global corporate carve-out transaction.”

Eviosys is a supplier of metal packaging, producing food cans and ends, aerosol cans, metal closures and promotional packaging.“Crown retained a 20% ownership interest in Eviosys,” outlines KPS. “KPS assembled an accomplished management team, led by CEO Tomás López, to lead the transformation of Eviosys into one of Europe’s largest and most profitable packaging companies.”

“In under three years of ownership, KPS, in partnership with management, successfully transformed Eviosys into a fully independent and significantly more profitable company focused on growth, innovation and sustainability.”

Eviosys, holding a product portfolio consisting entirely of metal packaging, has the largest reported metal food can manufacturing footprint in the EMEA region. It has over 6,300 employees in 44 manufacturing facilities across 17 countries in Europe, the Middle East and Africa. 

Improvements to strategic location and competition
KPS and Eviosys’ management team structurally improved the strategic position and competitiveness of Eviosys, resulting in an “approximate 50% improvement in profitability in under three years of KPS ownership.”

KPS invested nearly €225 million (US$240.8 million) in capital expenditures and significant resources to execute a “comprehensive business transformation plan” focused on optimizing Eviosys’ manufacturing footprint to drive asset utilization, reducing operational costs and growing volumes in new and existing geographies.

“Eviosys also made remarkable progress in advancing its sustainability objectives, surpassing its publicly committed greenhouse gas emissions reductions targets and achieving an EcoVadis Platinum rating in 2023, placing it in the top 1% of all companies ranked by EcoVadis,” highlights KPS.

“Eviosys is another demonstration of KPS’ investment strategy of seeing value where others do not, buying right and making businesses better, across economic cycles, geographies and industries over decades,” says Michael Psaros, co-founder and co-managing partner of KPS.

Rothschild & Co is serving as sole financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal counsel to KPS and Eviosys. 

Morgan Stanley & Co. and J.P. Morgan Securities are serving as financial advisors to Sonoco and Freshfields Bruckhaus Deringer is serving as Sonoco’s legal counsel.