Sonoco Completes Divestiture of Europe Contract Packaging Business to Prairie Industries Holdings backed by The Halifax Group

Rhea-AI Summary

Sonoco (NYSE: SON) announced the successful divestiture of its Europe contract packaging business for $120 million in cash to a subsidiary of Prairie Industries Holdings. This business, which generated $300 million in net sales in 2019, included six facilities in Poland and employed approximately 2,600 individuals. The divestiture aims to streamline operations and allow Sonoco to focus on its core Consumer and Industrial packaging sectors. Proceeds will be used to pay off remaining short-term debt, enhancing the company's liquidity position.

Positive

• Divestiture of Europe contract packaging business for $120 million.
• Streamlining of operations to focus on core packaging businesses.
• Improved liquidity position planned through debt repayment.

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• None.

HARTSVILLE, S.C., Dec. 01, 2020 (GLOBE NEWSWIRE) -- Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced it has completed the divestiture of its Europe contract packaging business to a subsidiary of Prairie Industries Holdings, a Wisconsin-based contract packaging and contract manufacturing firm backed by The Halifax Group, a Washington, D.C.-based global investment firm, for $120 million in cash.

Sonoco’s Europe contract packaging business (Sonoco Poland Packaging Services Sp. z o.o.) produced net sales of approximately $300 million in 2019 and provides full-service custom packaging and supply chain management solutions to global consumer product goods companies through six contract packaging facilities in three locations and a warehouse all in Poland. The business has been part of Sonoco’s Display and Packaging segment and has approximately 2,600 employees.

The divestiture is part of Sonoco efforts to simplify its operating structure to focus on growing its core Consumer and Industrial packaging businesses. Sonoco said it would use the net proceeds from the sale along with available cash to pay off the Company’s remaining short-term debt to further improve its strong liquidity position.

Rothschild & Co was financial advisor for Sonoco on the transaction. Haynsworth Sinkler Boyd served as legal advisor and was assisted in Poland by DWF Poland Jamka sp.k.

About Sonoco
Founded in 1899, Sonoco (NYSE: SON) is a global provider of a variety of consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services. With annualized net sales of approximately $5.4 billion, the Company has 23,000 employees working in approximately 300 operations in 36 countries, serving some of the world’s best known brands in some 85 nations. Sonoco is committed to creating sustainable products, services and programs for our customers, employees and communities that support our corporate purpose of Better Packaging. Better Life. The Company ranked first in the Packaging sector on Fortune’s World’s Most Admired Companies for 2020 as well as Barron’s 100 Most Sustainable Companies. For more information, visit www.sonoco.com.

About Prairie Industries Holdings
Founded in 1994, Prairie Industries Holdings, along with its subsidiary Nu-Pak, is a leading contract packaging and contract manufacturing business specializing in consumer goods and food products. The Prairie Industries division offers a wide range of packaging, converting, manufacturing, and warehousing services for consumer, household, and industrial products. The Nu-Pak division is a USDA and FDA certified food converting company focused on ready-to-eat food manufacturing and packaging. The company is headquartered in Prairie du Chien, WI. For more information, visit www.pind.com and www.nu-pak.com.

About The Halifax Group
Founded in 1999, The Halifax Group is a global investment firm that partners with managers and entrepreneurs to recapitalize and grow lower middle-market businesses with total enterprise values generally between $50 million and $300 million. Halifax specializes in equity recapitalizations, corporate carve-outs and management buyouts and invests across a variety of industries, including outsourced business services, health and wellness and franchising. The firm is headquartered in Washington, D.C. For more information, please visit www.thehalifaxgroup.com.

FAQ

What did Sonoco announce on December 1, 2020?

On December 1, 2020, Sonoco announced the divestiture of its Europe contract packaging business for $120 million.

How much did Sonoco's Europe contract packaging business generate in sales?

In 2019, Sonoco's Europe contract packaging business generated approximately $300 million in net sales.

Why did Sonoco sell its Europe contract packaging business?

Sonoco sold its Europe contract packaging business to simplify operations and focus on its core Consumer and Industrial packaging businesses.

What will Sonoco do with the proceeds from the divestiture?

Sonoco plans to use the net proceeds from the divestiture to pay off its remaining short-term debt.

How many employees did Sonoco's Europe contract packaging business have?

The business had approximately 2,600 employees.