Sonoco, one of the largest diversified global packaging companies, has announced that it has completed the acquisition of Weidenhammer Packaging Group (WPG), Europe’s leading provider of composite cans along with composite drums and rigid plastic containers, for €286m, or approximately $360m, in cash.
According to M. Jack Sanders, Sonoco president and chief executive officer, “We are extremely excited to welcome Weidenhammer’s leadership team and its 1,100 associates into the Sonoco family. The acquisition creates a global leader in rigid paper packaging and is expected to increase Sonoco’s combined global consumer-related packaging and services business to approximately $2.8bn in annual sales or approximately 53% of the Company’s combined revenue of approximately $5.4bn. In addition, the combination is expected to increase Sonoco’s net sales in Europe to approximately 21% of total sales.”
Headquartered in Hockenheim, Germany, Weidenhammer has approximately 1,100 employees and operates 13 production facilities, including five in Germany, along with individual plants in Belgium, France, Greece, The Netherlands, United Kingdom, United States, Chile and Russia. In addition to producing composite cans, drums and luxury tubes, WPG 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.
To finance the transaction, Sonoco entered into a Credit Agreement for a new $600m bank credit facility earlier in October. Included in that facility is a new $350m, five-year revolving credit facility, which replaces an existing credit facility under substantially the same terms. The $350m revolving credit facility is being used to support an identically sized commercial paper program. Also included in the Credit Agreement is a new $250m three-year term loan which was used to fund the acquisition.
As previously reported, the acquisition of Weidenhammer is expected to have no material impact to Sonoco’s fourth quarter 2014 base earnings and should be accretive to the Company’s 2015 base earnings in the range of $.09 to $.14 per share, including adjustments for purchase accounting.