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Sonoco Products Company SON announced that it has completed the previously announced sale of its Thermoformed and Flexibles Packaging (TFP) business to TOPPAN Holdings Inc. for $1.8 billion on a cash-free and debt-free basis. The move accelerates Sonoco’s portfolio optimization strategy and will help it focus on core industrial paper and consumer packaging businesses.
Sonoco will use the $1.5 billion of the after-tax cash proceeds to repay existing debt.
Details on Sonoco’s TFP Business
On Sept. 4, 2024, Sonoco announced that it commenced a strategic review of its TFP business, which used to be part of its Consumer Packaging segment. The deal to sell the business was finalized in December.
The segment’s products consist of rigid packaging (paper, metal and plastic) and flexible packaging. It caters to the consumer staples market focused on food, beverage, household and personal products.
TFP provides complex packaging solutions to various categories, including snacks, condiments, healthcare, prepared meals, fresh products, coffee and pets. TFP had revenues of $1.3 billion in 2024, contributing 51% to the Consumer Packaging segment’s revenues and 25% to Sonoco’s total revenues.
SON’s Efforts to Improve Profitability, Streamline Portfolio
To improve its long-term profitability and return capital to its shareholders, Sonoco has been simplifying its business portfolio and focusing on larger and core business units. SON continues to work on commercial, operational and supply-chain excellence programs, intended to shift the mix of its business toward higher-valued products and increase productivity. Its strategic pricing initiatives will also aid results.
This buyout will strengthen SON’s core metal packaging business and global presence while enhancing sustainability efforts. The company has identified more than $100 million of synergies expected to be realized within two years of closing.
In April 2024, Sonoco completed the divestiture of its Protective Solutions business (Protexic). The business manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances and other markets.
Sonoco has initiated a review of strategic alternatives for ThermoSafe, its leading temperature-assured packaging business. ThermoSafe is part of the All Other group of businesses and had revenues of $245 million in 2024. The company expects to complete the process in second half of 2025.
On Dec. 4, 2024, Sonoco completed the acquisition of Eviosys from KPS Capital Partners for approximately $3.9 billion. Eviosys will become part of SON’s Consumer Packaging segment.