Sonoco Signs Agreement to Acquire Weidenhammer Packaging Group
Sonoco, Hartsville, S.C., a diversified global packaging company, recently announced that it has signed a definitive agreement to acquire Weidenhammer Packaging Group, Europe's leading provider of composite cans, composite drums and rigid plastic containers, for approximately $383 million in cash. The final consideration is subject to a normal adjustment of net working capital.
Weidenhammer Packaging, based in Hockenheim, Germany, has approximately 1,100 employees and operates 13 production facilities, including five in Germany, along with individual plants in Belgium, France, Greece, Chile, the Netherlands, the United Kingdom, the United States and Russia. In addition to producing composite cans, drums and luxury tubes, Weidenhammer produces rigid plastic containers using state-of-the-art thin-walled injection molding technology with modern in-mold labeling. Markets served by the company include processed foods, powdered beverages, tobacco, confectionery, personal care, pet food, pharmaceuticals, and home and garden products.
According to M. Jack Sanders, Sonoco president and CEO, the acquisition of family-owned Weidenhammer Packaging Group will create a global leader in rigid paper packaging and is expected to increase Sonoco's global consumer-related packaging and services business to approximately $2.8 billion in annual sales, or approximately 53 percent of the company's combined revenue of approximately $5.3 billion. In addition, the combination is expected to increase Sonoco's net sales in Europe to approximately 21 percent of total sales.
Weidenhammer's projected 2014 sales are expected to be approximately $327 million, with EBITDA expected to be approximately $56 million. The transaction is expected to have no material impact to Sonoco's 2014 base earnings and should be accretive to Sonoco's 2015 base earnings in the range of $0.09 to $0.14 per share, including estimated adjustment for purchase accounting and first year synergies. Future accretion is expected through material internalization and other cost synergies.
"Combining Weidenhammer's state-of-the-art production and technological capability places Sonoco in a leading position to provide its global consumer product customers with unparalleled packaging expertise throughout North America and Europe, and creates a strong presence in the emerging markets of Southeast Asia, China, Eastern Europe and South America," Sanders said.