Sonoco, one of the largest diversified global packaging companies, announced that it has signed a definitive agreement to acquire Weidenhammer Packaging Group, Europe’s leading provider of composite cans along with composite drums and rigid plastic containers, for €286 million, or approximately $383 million, in cash. The final consideration is subject to a normal adjustment of net working capital.
Weidenhammer Packaging, headquartered 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, The Netherlands, UK, U.S., Chile and Russia. In addition to producing composite cans, drums and luxury tubes, Weidenhammer produces unique 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% 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% of total sales.
Weidenhammer Packaging’s projected 2014 sales are expected to be approximately €244 million, or $327 million, with projected EBITDA expected to be approximately €42 million, or $56 million.
“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 throughoutNorth America and Europe, and creates a strong presence in the emerging markets of Southeast Asia, China, Eastern Europe and South America,” Sanders said.
“Sonoco and Weidenhammer bring 175 years of combined consumer packaging innovation and expertise to our combined customers,” Ralf Weidenhammer added. “After almost 60 years of successful business operations, we are convinced that the merger with Sonoco will open up new opportunities for our business, our customers and partners, as well as to our employees.”
Sonoco intends to fund the acquisition through a combination of existing cash and debt with an estimated combined net credit leverage ratio of 1.75 times at closing. In 2015, the company intends to use free cash flow for debt repayment. The acquisition is subject to governmental regulatory review and is expected to close in the fourth quarter of 2014.