Sonoco to buy protective packaging firm for $550 mln
Industrial and consumer packaging company Sonoco Products Co will buy privately held Tegrant Corp for $550 million in its largest acquisition yet to expand in the market for protective-packaging products such as molded foam and blister packs.
Industrial and consumer packaging company Sonoco Products Co will buy privately held Tegrant Corp for $550 million in its largest acquisition yet to expand in the market for protective-packaging products such as molded foam and blister packs.
Sonoco, which is buying Tegrant from private equity firm Metalmark Capital, said the deal would add 10 cents a share to its adjusted earnings in 2012.
The combined company will have a total revenue of $5 billion in 2012.
DeKalb, Illinois-based Tegrant, the maker of Protexic and ThermoSafe brands, serves the consumer electronics, automotive, pharmaceuticals and food industries.
The company operates more than 30 manufacturing, design and testing facilities in the United States, Mexico and Ireland and employs more than 2,000 employees. It is expected to generate sales of about $440 million in 2011.
New York-based MetalMark, formerly known as Morgan Stanley Capital Partners, invested in Tegrant in February 2007. It has put money into other packaging companies such as Silgan Holdings , which makes packages for consumer goods, and Jefferson Smurfit Corp, which is now part of Rock-Tenn Co .
"Sonoco's combined protective packaging businesses will represent approximately 11 percent of Sonoco's projected 2012 sales and further enhance our ability to grow in both consumer and industrial markets globally," CEO Harris DeLoach said in a statement.
The acquisition, which will be funded by cash and debt, is expected to close in November.
Sonoco, whose largest customer is Procter & Gamble, last acquired Robinson Paperboard Packaging Ltd in a deal that is expected to add $10 million in annual sales.
Macquarie Capital served as financial adviser to Sonoco, while Tegrant was represented by Sagent Advisors.
Source: Sonoco Products Co
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