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Dive Brief:
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Sonoco has found a buyer for its Thermoformed and Flexibles Packaging business. Japan-based Toppan Holdings plans to acquire it for $1.8 billion on a cash-free and debt-free basis.
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The transaction also includes the sale of Sonoco’s Trident business, according to a securities filing Wednesday. That business provides graphics production and pre-media services to consumer brands.
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The parties expect the deal to close in the first half of 2025, pending the customary regulatory approvals. Sonoco will use net proceeds from the transaction to pay down debt. TFP had revenue of approximately $1.3 billion in 2023 on a pro forma standalone basis.
Dive Insight:
The deal aligns with the strategy that Sonoco emphasized this year for streamlining its business. CEO Howard Coker said in a news release that the TFP sale accelerates the portfolio simplification strategy.
“TFP is a great business with leadership positions in its served markets,” he said. “We will work closely with Toppan to ensure a successful transition for our employees, customers, and suppliers.”
Sonoco had announced in September that it launched a “review of strategic alternatives” for TFP. About six months earlier, the company had disclosed its business optimization plan in which it combined its $600 million flexible packaging and $700 million thermoforming packaging businesses and put the unit under the consumer segment. Flex-therm became one of Sonoco’s four main business units under the restructuring, joining metal packaging, rigid paper containers and industrial packaging.
Sonoco also announced or completed other M&A transactions this year. It closed the $3.8 billion acquisition of Swedish metal packaging company Eviosys about two weeks ago. During Sonoco’s most recent earnings report in November, the company described the sale of two production facilities in China for $419 million.
Executives on the company’s November earnings call also confirmed that Sonoco still plans to divest ThermoSafe, its temperature-assured packaging business, but would wait until after the Eviosys and TFP deals are complete. That’s expected by the third quarter of 2025.
Similarly, Toppan has been transforming its portfolio while working to grow its business. CEO Hideharu Maro said in a statement that this deal is a milestone in the company’s global strategy to scale up.