KPS CAPITAL PARTNERS TO SELL EVIOSYS TO SONOCO FOR €3.615 BILLION
KPS Capital Partners announced it will sell Eviosys to Sonoco Products Company for €3.615 billion (~$3.9 billion). Sonoco may pay up to $200 million in stock. The deal, expected to close by the end of 2024, requires regulatory approvals and other conditions. Eviosys, a leading metal packaging supplier in EMEA, employs 6,300 people across 44 facilities in 17 countries. It specializes in sustainable, infinitely recyclable metal packaging. KPS acquired Eviosys from Crown Holdings in 2021, boosting its profitability by 50% through strategic investments and transformation. Eviosys achieved significant sustainability milestones, including an EcoVadis Platinum rating. The sale reflects KPS' strategy of enhancing business value and is expected to benefit customers, employees, and investors of both Eviosys and Sonoco.
- Eviosys' profitability improved by approximately 50% under KPS ownership.
- Significant capital investments of nearly €225 million were made to optimize operations.
- Eviosys achieved an EcoVadis Platinum rating, placing it in the top 1% for sustainability.
- Sonoco's acquisition of Eviosys is valued at €3.615 billion (~$3.9 billion).
- The transaction is subject to regulatory approvals and customary closing conditions, which could delay or impede its completion.
Insights
The sale of Eviosys to Sonoco for
For investors, the deal's expected closure by the end of 2024 introduces a medium-term horizon for realizing the benefits. The substantial investment and the improved profitability under KPS's ownership indicate that Eviosys is a well-managed and growing company, suggesting this acquisition could enhance Sonoco’s financial performance.
Moreover, the transaction is subject to regulatory approvals and customary closing conditions, which could pose some risks or delays. However, given Eviosys' strong sustainability credentials, this acquisition could also help Sonoco meet its environmental targets and appeal to ESG-focused investors.
This acquisition allows Sonoco to significantly bolster its presence in the metal packaging market in EMEA (Europe, Middle East, Africa) regions, which is highly strategic given Eviosys' extensive manufacturing footprint with 44 facilities across 17 countries. This move not only broadens Sonoco's geographical presence but also enhances its product portfolio with infinitely recyclable metal packaging solutions, tapping into the growing consumer demand for sustainable packaging.
The 50% improvement in profitability over three years under KPS management is an important metric, showcasing the effective transformation and optimization strategies implemented. For retail investors, this could signal future growth potential and improved market positioning for Sonoco, especially in the sustainable packaging sector, which is expected to grow considerably.
The completion of this transaction is contingent upon several regulatory and procedural hurdles, including works council consultations and the receipt of required regulatory approvals. This introduces a degree of uncertainty and potential delay. Additionally, the involvement of multiple high-profile financial and legal advisors such as Rothschild & Co, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Morgan Stanley and J.P. Morgan underscores the complexity and significance of the deal.
From a legal perspective, the successful navigation of these regulatory requirements will be important for the deal’s closure. Retail investors should be aware that while regulatory approval is typically a formality in such acquisitions, it isn't guaranteed and could impact the transaction timeline.
Eviosys is a leading global supplier of metal packaging, producing food cans and ends, aerosol cans, metal closures and promotional packaging to preserve the products of hundreds of consumer brands. Eviosys has the largest metal food can manufacturing footprint in the EMEA region, with over 6,300 employees in 44 manufacturing facilities across 17 countries in
KPS created Eviosys to acquire Crown Holdings, Inc.'s ("Crown", NYSE: CCK) EMEA Food and Consumer Packaging Business in August 2021 in a highly complex global corporate carve-out transaction. Crown retained a
KPS and Eviosys' management team structurally improved the strategic position and competitiveness of Eviosys, resulting in an approximate
Michael Psaros, Co-Founder and Co-Managing Partner of KPS, said, "Eviosys is another demonstration of KPS' investment strategy of seeing value where others do not, buying right and making businesses better, across economic cycles, geographies and industries over decades.
We are proud of Eviosys' extraordinary transformation under our ownership. Eviosys demonstrates our ability to build industry-leading companies on a global basis. The Company's success is a direct result of KPS' commitment to, and investment in, the Company's R&D, innovative new technologies and products, manufacturing facilities and people. We believe the acquisition of Eviosys by Sonoco will benefit the combined companies' customers, employees and investors. The industrial logic is compelling.
We congratulate and thank Tomás López, Eviosys' Chief Executive Officer, along with the Company's senior management team, for their strategic vision and brilliant execution, which resulted in tremendous value creation under KPS' ownership in a short period of time. We also thank Crown for being a highly constructive and supportive partner."
Tomás López, Chief Executive Officer of Eviosys, added, "For over 200 years, Eviosys and its predecessor companies have provided best-in-class metal packaging that enhances the appeal of our customers' brands. KPS recognized the investment opportunity and upside presented by Eviosys. KPS' extensive manufacturing expertise and experience provided us with the plan and resources that resulted in enormous value creation. We thank KPS for creating a culture in our company focused on continuous improvement, manufacturing excellence and environmental stewardship. We are proud of our people, products and service. By combining with Sonoco, we will work to bring our high quality, sustainable and innovative packaging solutions to new and existing customers around the globe. Our companies share a strong commitment to providing the highest levels of customer service, safety for our employees, and operating efficiencies."
Rothschild & Co is serving as sole financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to KPS and Eviosys. Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are serving as financial advisors to Sonoco and Freshfields Bruckhaus Deringer LLP is serving as Sonoco's legal counsel.
About Eviosys
Eviosys is a leading global supplier of metal packaging, producing food cans and ends, aerosol cans, metal closures and promotional packaging to preserve the products of hundreds of consumer brands. Eviosys has the largest metal food can manufacturing footprint in the EMEA region, with over 6,300 employees in 44 manufacturing facilities across 17 countries in
About KPS Capital Partners, LP
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately
About Sonoco
With net sales of approximately
Forward-Looking Statements
This presses release contains "forward-looking statements", including statements regarding the contemplated transaction. Forward-looking statements can generally be identified by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "potential," "seek," "should," "think," "will," "would" and similar expressions, or they may use future dates. Forward-looking statements in this document include, without limitation, statements regarding the Company's expectations as to the completion and timing of the contemplated transaction, including with respect to works council consultations, regulatory approvals and the satisfaction of other closing conditions, and the anticipated impacts of the contemplated transaction. These forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause actual results to differ include, among other things: the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement or could otherwise cause the transactions contemplated therein to fail to close; the inability of the Company or Sonoco to satisfy the conditions to closing; and other risks and uncertainties. The Company undertakes no obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. All forward-looking statements in this document are qualified in their entirety by this cautionary statement.
Statements By Portfolio Company Executives
Certain statements about KPS made by portfolio company executives herein are intended to illustrate KPS' business relationship with such persons, including with respect to KPS' facilities as a business partner, rather than KPS' capabilities or expertise with respect to investment advisory services. Portfolio company executives were not compensated in connection with the communication of such statements, although they generally receive compensation and investment opportunities in connection with their portfolio company roles, and in certain cases are also owners of portfolio company securities and/or investors in KPS-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.
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SOURCE KPS Capital Partners, LP
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