Sonoco to Acquire Eviosys

Advances Sonoco’s Shareholder Value Creation Strategy Through Disciplined and High Return Capital Investment

Transaction Value of Approximately $3.9 Billion Represents a Multiple of 7.3x 2024 Expected Adjusted EBITDA Including Synergies

Rodger Fuller, Chief Operating Officer, to Lead Integration; Expect to Achieve Over $100 Million of Synergies Within 24 Months

Acquisition Expected to be Immediately Accretive to Adjusted EPS and Over 25% Accretive to 2025 Expected Adjusted EPS¹

Transaction Advances Portfolio Transformation Strategy with Initiated Execution of at Least $1 Billion Divestiture Plan, with Net Proceeds for Deleveraging

Sonoco Intends to Retain an Investment Grade Rating with Plans to Deleverage to Below 3.0x Within 24 Months

Sonoco Products Company (“Sonoco” or the “Company”), a global leader in high-value sustainable packaging, announced it has entered into an agreement to acquire Eviosys, Europe’s leading food cans, ends and closures manufacturer, from KPS Capital Partners, LP (“KPS”) for approximately $3.9 billion (the “Transaction”).

The Transaction accelerates Sonoco’s strategy to focus on and scale its core businesses and invest in high return opportunities, both organically and inorganically. Following the Transaction, Sonoco will be the leading metal food can and aerosol packaging manufacturer globally. Both Sonoco’s metal business and Eviosys have meaningful commercial momentum and the Transaction facilitates Sonoco’s ability to partner with customers and lead with innovation and sustainability.

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 approximately 6,300 employees in 44 manufacturing facilities across 17 countries. Sonoco estimates Eviosys’s 2024 revenues will be approximately $2.5 billion and its 2024 adjusted EBITDA will be approximately $430 million. Eviosys has meaningful commercial and operational momentum and has increased EBITDA by approximately 50% since 2021.

Sonoco expects to achieve over $100 million of synergies from the integration of Eviosys with Sonoco’s complementary metal can business. Rodger Fuller, Sonoco’s Chief Operating Officer, will lead the integration with a focus on customer and supplier relationships, employee continuity, operational excellence, and synergy realization, while combining the best of Sonoco’s culture with the rich history and heritage of Eviosys.

“The acquisition of Eviosys establishes our global leadership in metal food can and aerosol packaging, marking an exciting milestone in our strategy to scale our core strategic metal packaging platform and position Sonoco for long-term value creation,” said Howard Coker, President and Chief Executive Officer of Sonoco. “Eviosys brings extensive global reach and an attractive, growing customer base that perfectly complements our existing metal packaging offering. Together with the talented team at Eviosys, we are focused on unlocking new opportunities in attractive end-markets, providing our customers with a stronger value proposition and generating strong returns for our shareholders.”

“For over 200 years, we have provided best-in-class metal packaging that enhances the appeal of our customers’ brands,” said Tomas Lopez, Chief Executive Officer of Eviosys. “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, and I look forward to joining the incredibly talented team at Sonoco as we work to deliver the benefits of this acquisition to all our stakeholders.”

Strategic and Financial Benefits

• Establishes Global Leadership in Our Core Metal Packaging Business:
  • The acquisition of Eviosys builds on the 2022 acquisition of Ball Metalpack and generates another leading position in a core business for Sonoco.
  • Combining Eviosys’s leading position in EMEA with Sonoco’s existing position in the U.S. expands Sonoco’s total addressable market in metal packaging to approximately $25 billion globally. Sonoco plans to leverage Eviosys’s highly complementary portfolio to more effectively serve both new and existing customers and accelerate organic growth opportunities in consumer-oriented end markets. The combined manufacturing footprint is well invested with upgraded equipment and positioned in close proximity to key customers, allowing Sonoco to unlock and drive operational efficiencies.
• Creates Clear and Actionable Synergies:
  • Sonoco has identified over $100 million of potential synergies from the optimization of sourcing, supply chain improvements, raw material procurement savings, manufacturing footprint optimization and streamlining SG&A. The majority of the synergies are expected to be realized in the first year of ownership with the balance realized over the following 12 months.
• Strong Value Creation Profile:
  • Sonoco expects the Transaction to be immediately accretive to Adjusted EPS and over 25% accretive to 2025 expected Adjusted EPS². Eviosys generates meaningful operating cash flow and pro forma for the transaction Sonoco’s EBITDA minus capital expenditures is expected to be approximately 40% greater in 2025. The acquisition is expected to result in a return on invested capital in excess of Sonoco’s cost of capital beginning in year one.
• Sonoco to Advance Portfolio Transformation Strategy with Divestitures:
  • The acquisition of Eviosys is a meaningful advancement of our portfolio transformation strategy that also includes significant divestitures. Sonoco intends to divest ThermoSafe, its leading temperature assured packaging business, as well as other businesses and expects to achieve at least $1 billion of total proceeds from divestitures in the next twelve to eighteen months. We believe that these divestitures enable greater strategic clarity and operational focus while also generating proceeds to fund deleveraging and high return capital investments in core businesses.
• Maintains Sonoco’s Commitment to its Investment Grade Credit Profile:
  • Sonoco intends to maintain its investment grade credit rating. Sonoco has structured the financing of the Transaction to align with its strategic priority of retaining access to capital and prudent financial policy. Sonoco intends to finance the transaction with new debt and the proceeds from an issuance of up to $500 million in equity. KPS has agreed to invest up to $200 million in Sonoco to support the Transaction through the equity offering. With debt reduction from divestitures and cash from operations, Sonoco expects to achieve net leverage below 3.0x within 24 months of the Transaction.
• Accelerates Sustainability Commitments:
  • Sonoco and Eviosys’s combined management teams are committed to accelerating sustainability initiatives for the environment and the communities where we operate. Eviosys also advances Sonoco’s portfolio of sustainable solutions and offerings across regions and end markets to support the sustainability needs of our customers. Sustainability integration will be a cornerstone of our integration efforts.

Transaction Details, Financing, Timing and Approvals

Under the terms of the agreement, Sonoco will acquire Eviosys from KPS for approximately $3.9 billion (€3.615 billion) on a cash-free, debt-free basis. Sonoco has committed financing for the entirety of the transaction price.

The Boards of Directors of both companies have unanimously approved the transaction. The Transaction expected to occur by the end of 2024, subject to the completion of required works council consultations, the receipt of required regulatory approvals and other customary closing conditions.

Eviosys’s current CEO, Tomas Lopez, will remain with Sonoco and lead the Company’s EMEA metal packaging business.

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 manufacturing footprint in Europe, the Middle East and Africa (EMEA) with 6,300 employees in 44 manufacturing facilities across 17 countries in the region. In 2023, it generated €2.41 billion in revenue. Eviosys is a portfolio company of KPS Capital Partners, LP.

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 $21.6 billion of assets under management (as of March 31, 2024).  For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing.  KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage.  The KPS Funds’ portfolio companies currently generate aggregate annual revenues of approximately $19.6 billion, operate 223 manufacturing facilities in 26 countries, and have approximately 47,000 employees, directly and through joint ventures worldwide (as of March 31, 2024).  The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.

About Sonoco

Founded in 1899, Sonoco (NYSE:SON) is a global provider of packaging products. With net sales of approximately $7.3 billion in 2022, the Company 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. The Company ranked first in the Packaging sector on Fortune’s World’s Most Admired Companies for 2022 as well as being included in Barron’s 100 Most Sustainable Companies for the fourth consecutive year. For more information on the Company, visit our website at www.sonoco.com.

Contact:

Lisa Weeks – Media Relations – lisa.weeks@sonoco.com – (843) 383-7524

Source: Sonoco Products Company