Sonoco Products Company announces the sale of its Thermoformed and Flexibles Packaging business to TOPPAN Holdings for $1.8 billion.
Quiver AI Summary
Sonoco Products Company has announced the sale of its Thermoformed and Flexibles Packaging business to TOPPAN Holdings Inc. for approximately $1.8 billion, cash-free and debt-free, subject to customary adjustments and regulatory approvals. This transaction follows a strategic review of Sonoco's TFP business and is expected to close in the first half of 2025. The decision to divest aims to simplify Sonoco's portfolio and focus on its remaining industrial paper and consumer packaging divisions. The net proceeds from the sale are intended to be used to repay existing debt. Sonoco's CEO, Howard Coker, expressed pride in TFP's history and commitment to customer satisfaction, while emphasizing the importance of a smooth transition to Toppan for all stakeholders involved.
Potential Positives
- Sonoco announced the sale of its Thermoformed and Flexibles Packaging business for approximately $1.8 billion, which demonstrates strong financial health and attractive asset value.
- The transaction aligns with Sonoco's strategy to simplify its portfolio and focus capital investments on core businesses, potentially leading to improved operational efficiency.
- Net proceeds from the sale are expected to be used to repay existing debt, which may enhance Sonoco's balance sheet and financial stability.
- The CEO emphasized a commitment to a smooth transition for employees, customers, and suppliers, showcasing responsible corporate stewardship and dedication to stakeholder relationships.
Potential Negatives
- The sale of the Thermoformed and Flexibles Packaging business could indicate weaker performance in that sector, leading to questions about the company's strategic direction and potential loss of market share.
- Completion of the transaction is subject to regulatory approvals, which introduces uncertainty and could delay the anticipated benefits of the divestiture.
- The announcement raises concerns about the potential diversion of management's focus during the transition period, which may impact the company's operational effectiveness and existing business performance.
FAQ
What is the recent transaction Sonoco announced?
Sonoco announced it will sell its Thermoformed and Flexibles Packaging business to TOPPAN Holdings Inc. for approximately $1.8 billion.
When is the Sonoco transaction expected to close?
The transaction is expected to close in the first half of 2025, pending regulatory approvals and customary closing conditions.
What will Sonoco do with the net proceeds from the sale?
The net proceeds from the sale are expected to be used to repay existing debt.
Who are the financial advisors for Sonoco in this transaction?
Goldman Sachs & Co. LLC and RBC Capital Markets, LLC are acting as financial advisors for Sonoco.
What is Sonoco's commitment to sustainability?
Sonoco is dedicated to creating sustainable products with the corporate purpose of "Better Packaging. Better Life."
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$SON Insider Trading Activity
$SON insiders have traded $SON stock on the open market 1 times in the past 6 months. Of those trades, 0 have been purchases and 1 have been sales.
Here's a breakdown of recent trading of $SON stock by insiders over the last 6 months:
- JOHN M FLORENCE (VP, Gnl Council, Secy, CHRO) sold 13,660 shares.
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$SON Hedge Fund Activity
We have seen 212 institutional investors add shares of $SON stock to their portfolio, and 275 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- AMERICAN CENTURY COMPANIES INC removed 2,673,270 shares (-91.5%) from their portfolio in Q3 2024
- PACER ADVISORS, INC. removed 1,958,122 shares (-98.9%) from their portfolio in Q3 2024
- MILLENNIUM MANAGEMENT LLC added 1,663,890 shares (+1252.6%) to their portfolio in Q3 2024
- VICTORY CAPITAL MANAGEMENT INC removed 850,624 shares (-38.8%) from their portfolio in Q3 2024
- SILVERCREST ASSET MANAGEMENT GROUP LLC removed 489,461 shares (-52.4%) from their portfolio in Q3 2024
- PRIVATE MANAGEMENT GROUP INC added 457,523 shares (+inf%) to their portfolio in Q3 2024
- DIMENSIONAL FUND ADVISORS LP added 372,247 shares (+14.1%) to their portfolio in Q3 2024
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
HARTSVILLE, S.C., Dec. 18, 2024 (GLOBE NEWSWIRE) -- Sonoco Products Company ("Sonoco" or the "Company") (NYSE: SON), a global leader in high-value sustainable packaging, today announced it has entered into an agreement to sell its Thermoformed and Flexibles Packaging business ("TFP") to TOPPAN Holdings Inc. ("Toppan") for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments (the "Transaction").
The Transaction, which reflects the completion of the previously announced strategic review of Sonoco's TFP business, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025. Net proceeds from the transaction are expected to be used to repay existing debt.
"The decision to sell our TFP business accelerates our portfolio simplification strategy, streamlines our organizational structure, and enables more focused capital investments in our remaining industrial paper and consumer packaging businesses," said Howard Coker, Sonoco's President and Chief Executive Officer. "TFP is a great business with leadership positions in its served markets. We greatly value TFP's tenured history as part of the Sonoco family, and I am personally proud of their long-standing commitment to serve our customers with both innovative and high quality packaging products. We will work closely with Toppan to ensure a successful transition for our employees, customers, and suppliers and wish the entire team all the best in the future."
Goldman Sachs & Co. LLC is acting as lead financial advisor to Sonoco. RBC Capital Markets, LLC is also acting as financial advisor to Sonoco. Freshfields LLP is acting as Sonoco's legal advisor. Houlihan Lokey is acting as lead financial advisor to Toppan. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. is also acting as financial advisor to Toppan. Morrison & Foerster LLP is acting as Toppan's legal advisor.
About Sonoco:
With net sales of approximately $6.8 billion in 2023, Sonoco has approximately 22,000 employees working in more than 300 operations around the world, serving some of the world's best-known brands. With our corporate purpose of Better Packaging. Better Life., Sonoco is committed to creating sustainable products and a better world for our customers, employees, and communities. Sonoco was named one of America's Most Responsible Companies by Newsweek. For more information on the Company, visit our website at
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Forward-Looking Statements
Certain statements made in this communication are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "accelerate," "committed," "enable," "ensure," "expect," "future," "will," or the negative thereof, and similar expressions identify forward-looking statements.
Forward-looking statements in this communication include, but are not limited to, the Company's pending Transaction and the anticipated timing thereof; the anticipated effects of the divestiture on the Company's portfolio simplification strategy, streamlining of the Company's organizational structure, and capital investments in the Company's remaining businesses; and the Company's expected use of the net proceeds of the divestiture.
These forward-looking statements are made based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning the Company's future financial and operating performance. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual results may differ materially from those expressed or forecasted in such forward-looking statements. Risks and uncertainties include, among other things, risks related to the pending Transaction, including that such Transaction will not be completed on the timing or terms the Company anticipates, or at all; the ability to receive regulatory approvals for the Transaction in a timely manner, on acceptable terms or at all, or to satisfy the other closing conditions to the Transaction; the Company's ability to realize anticipated benefits of the Transaction, or that such benefits may take longer to realize than expected; diversion of management's attention; the potential impact of the announcement or consummation of the Transaction on relationships with employees, clients and other third parties; the Company's ability to execute on its strategy, including with respect to portfolio simplification, organizational streamlining, and capital investments, and achieve the benefits it expects therefrom; and the other risks, uncertainties and assumptions discussed in the Company's filings with the Securities and Exchange Commission, including its most recent reports on Forms 10-K and 10-Q, particularly under the heading "Risk Factors". Except as required by applicable law, the Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed herein might not occur.
Contact Information
Investors
Lisa Weeks
Vice President of Investor Relations & Communications
lisa.weeks@sonoco.com
843-383-7524