Platinum Equity and Ball Corporation to Sell Ball Metalpack to Sonoco for $1.35 Billion

Rhea-AI Summary

On December 20, 2021, Ball Corporation (NYSE:BLL) announced the sale of Ball Metalpack to Sonoco (NYSE:SON) for approximately $1.35 billion. The sale is subject to regulatory review and is expected to close in Q1 2022. Ball Metalpack, a joint venture between Platinum Equity and Ball Corporation, focuses on sustainable steel containers for various products. The transaction aims to enhance shareholder value through potential share buybacks and dividends, following a successful transformation program over three years that invested $100 million in operational improvements.

Positive

• Transaction valued at approximately $1.35 billion supports shareholder value through expected share buybacks and dividends.
• Ball Metalpack has undergone a successful transformation, investing $100 million in operational improvements and achieving strong performance.

Negative

• None.

LOS ANGELES and WESTMINSTER, Colo., Dec. 20, 2021 /PRNewswire/ -- Platinum Equity and Ball Corporation (NYSE:BLL) today announced the signing of a definitive agreement to sell Ball Metalpack to Sonoco (NYSE: SON) in a transaction valued at approximately $1.35 billion. Closing of the transaction is subject to satisfaction of customary closing conditions, including regulatory review, and is expected to be completed in the first quarter of 2022.

Ball Metalpack, based in Broomfield, Colorado, manufactures sustainable steel containers for aerosol products, food, household consumables, pet food, nutritional and other products in the United States. It was formed as a joint venture between Platinum Equity and Ball Corporation in 2018. Platinum Equity owns 51 percent of the business and Ball Corporation owns 49 percent.

"We have known the Platinum team for a decade, going back to their investment in BWAY. Over the years, it has become clear to us at Ball that Platinum is a differentiated private equity firm with a tremendous operational capability and high standards of integrity," said John A. Hayes, chairman and CEO of Ball. "Platinum is a trusted partner – the firm's carve out expertise, operational capabilities and relentless approach to execution proved to be a powerful combination, and the impact we have been able to achieve together speaks for itself. The expected proceeds from the sale of our stake in the Ball Metalpack joint venture, combined with the upfront cash received in 2018, create an excellent outcome for Ball shareholders, further enhancing Ball's ability to return value to shareholders via share buybacks and dividends, and to make EVA enhancing investments."

The sale is the culmination of a comprehensive three-year transformation program through which Platinum Equity and Ball established Ball Metalpack as a standalone enterprise, then drove a broad range of operational improvements throughout the business. Priorities for the transformation program included footprint optimization, new product development, expansion of the company's capabilities, and investments in growth and operational excellence. Ball Metalpack has invested approximately $100 million in state-of-the-art manufacturing infrastructure since 2018.

"Three years ago John Hayes came to us with a clear-eyed vision for what Ball Metalpack could accomplish by creating a structure that would bring us together as partners and deploy the full Platinum toolkit to create value," said Platinum Equity Partner Louis Samson. "We quickly mapped out a plan, negotiated a deal that aligned our interests, and then our teams went to work. I'm proud that by joining forces we were able to deliver on behalf of the company and its shareholders."

Mr. Samson noted that Platinum Equity has a lot of experience creating similar transaction structures with large corporations when they are seeking to divest assets.

"We find that corporate sellers can benefit from a structure that allows for a partial sale at the outset of their divestment process, with the opportunity to deliver incremental value by participating in the upside we can create together," said Mr. Samson. "This investment is another successful story of aligning our interests with those of one of the world's leading corporations and delivering value for both of us."

Ball joins Caterpillar (Neovia Logistics), Emerson (Artesyn Technologies and Vertiv), and Telstra (Sensis) on the list of companies that have participated in equity upside along with Platinum Equity.

"Ball Metalpack is delivering strong performance, serves attractive end markets, and provides sustainable packaging solutions that are in increasingly high demand," said Platinum Equity Managing Director Delara Zarrabi. "We appreciate all the hard work Jim Peterson and the entire team at Ball Metalpack have done to put the company in a position to join a world class organization like Sonoco."

Goldman Sachs is serving as financial advisor to Ball Metalpack on the sale to Sonoco. Latham & Watkins LLP is serving as Platinum Equity's legal counsel on the transaction. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Ball Corporation.

About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity is a global investment firm with more than $25 billion of assets under management and a portfolio of approximately 50 operating companies that serve customers around the world. The firm is currently investing from Platinum Equity Capital Partners V, a $10 billion global buyout fund, and Platinum Equity Small Cap Fund, a $1.5 billion buyout fund focused on investment opportunities in the lower middle market. Platinum Equity specializes in mergers, acquisitions and operations – a trademarked strategy it calls M&A&O^® – acquiring and operating companies in a broad range of business markets, including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, telecommunications and other industries. Over the past 25 years Platinum Equity has completed more than 300 acquisitions.

About Ball Corporation
Ball Corporation supplies innovative, sustainable aluminum packaging solutions for beverage, personal care and household products customers, as well as aerospace and other technologies and services primarily for the U.S. government. Ball Corporation and its subsidiaries employ 21,500 people worldwide and reported 2020 net sales of $11.8 billion. For more information, visit www.ball.com, or connect with us on Facebook or Twitter.

Forward-Looking Statements
This release contains "forward-looking" statements concerning future events and financial performance. Words such as "expects," "anticipates," "estimates," "believes," and similar expressions typically identify forward-looking statements, which are generally any statements other than statements of historical fact, . Such statements are based on current expectations or views of the future and are subject to risks and uncertainties, which could cause actual results or events to differ materially from those expressed or implied. You should therefore not place undue reliance upon any forward-looking statements and they should be read in conjunction with, and qualified in their entirety by, the cautionary statements referenced below. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key factors, risks and uncertainties that could cause actual outcomes and results to be different are summarized in filings with the Securities and Exchange Commission, including Exhibit 99 in our Form 10-K, which are available on our website and at www.sec.gov. Additional factors that might affect: a) our packaging segments include product capacity, supply, and demand constraints and fluctuations and changes in consumption patterns; availability/cost of raw materials, equipment, and logistics; competitive packaging, pricing and substitution; changes in climate and weather; footprint adjustments and other manufacturing changes, including the startup of new facilities and lines; failure to achieve synergies, productivity improvements or cost reductions; unfavorable mandatory deposit or packaging laws; customer and supplier consolidation; power and supply chain interruptions; changes in major customer or supplier contracts or loss of a major customer or supplier; inability to pass through increased costs; political instability and sanctions; currency controls; changes in foreign exchange or tax rates; and tariffs, trade actions, or other governmental actions, including business restrictions and shelter-in-place orders in any country or jurisdiction affecting goods produced by us or in our supply chain, including imported raw materials; b) our aerospace segment include funding, authorization, availability and returns of government and commercial contracts; and delays, extensions and technical uncertainties affecting segment contracts; c) the Company as a whole include those listed above plus: the extent to which sustainability-related opportunities arise and can be capitalized upon; changes in senior management, succession, and the ability to attract and retain skilled labor; regulatory actions or issues including those related to tax, ESG reporting, competition, environmental, health and workplace safety, including U.S. FDA and other actions or public concerns affecting products filled in our containers, or chemicals or substances used in raw materials or in the manufacturing process; technological developments and innovations; the ability to manage cyber threats; litigation; strikes; disease; pandemic; labor cost changes; inflation; rates of return on assets of the Company's defined benefit retirement plans; pension changes; uncertainties surrounding geopolitical events and governmental policies, including policies, orders, and actions related to COVID-19; reduced cash flow; interest rates affecting our debt; and successful or unsuccessful joint ventures, acquisitions and divestitures, and their effects on our operating results and business generally.

Media Contacts:

Dan Whelan
Platinum Equity
(310) 282-9202
dwhelan@platinumequity.com

Bradford Walton
Ball Communications
(415) 254-7168
Bradford.walton@ball.com

 

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SOURCE Platinum Equity

FAQ

When is the expected closing date for Ball Corporation's sale of Ball Metalpack to Sonoco?

The sale is expected to close in the first quarter of 2022, pending regulatory review.

What is the value of the transaction between Ball Corporation and Sonoco?

The transaction is valued at approximately $1.35 billion.

What market does Ball Metalpack serve?

Ball Metalpack manufactures sustainable steel containers for aerosol products, food, household consumables, and pet food.

How much did Ball Metalpack invest in operational improvements?

Ball Metalpack invested approximately $100 million in state-of-the-art manufacturing infrastructure since 2018.

What role did Platinum Equity play in the sale of Ball Metalpack?

Platinum Equity was a partner in the joint venture and facilitated the transformation and sale of Ball Metalpack to Sonoco.