Sonoco, the company behind the Pringles can, is purchasing Eviosys from KPS Capital Partners for $3.9 billion; the move is expected to make Sonoco the ‘leading’ metal food can and aerosol packaging manufacturer worldwide.

In what Financial Times describes as “one of the first big private equity windfalls from a wave of dealmaking seen in 2021”, KPS Capital Partners is selling Eviosys after owning it for around three years. It is set to generate a windfall of $1.8 billion dollars for KPS and its investors; according to a source, it will increase their initial equity investment by approximately 3.2x because debt was used to finance the deal.

Financial Times goes on to explain that KPS originally acquired Eviosys from rival food and beverage can manufacturer Crown Holdings at a price of $2.7 billion back in 2021. Now it is expected to earn a “swift and large windfall” for Eviosys by increasing its profitability to around 50% and selling it to “a larger corporate buyer that would find value in its specialized packaging operations”.

The acquisition is anticipated to scale up Sonoco’s metal packaging capabilities in line and pursue long-term value creation – aligning with its overall strategy of scaling up its core businesses and investing organically and inorganically in high-return opportunities.

Said to have the largest metal food can manufacturing footprint in the EMEA region, Eviosys produces food cans and ends, aerosol cans, metal closures, and promotional packaging for ‘hundreds’ of consumer brands. By Sonoco’s estimate, Eviosys will generate approximately $2.5 billion in revenues in 2024, while its 2024 adjusted EBITDA is placed at around $430 million after an approximate increase of 50% since 2021.

Over $100 million of synergies are expected to result from the integration of Eviosys with Sonoco’s complementary metal can business.

Howard Coker, president and CEO of Sonoco, commented: “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. 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,” added Tomas Lopez, CEO 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.”

FGS Global is set to represent Sonoco in the transaction.

Last year, Sonoco contributed to the development of a 90% paper Pringles tube, consisting of a recycled paper body and a paper base. Pringles’ brand owner, Kellanova, anticipated that the redesign would contribute towards its targets of achieving 100% recyclable, reusable, and/or compostable packaging by 2025, with around 48 million paper tubes expected to be sold exclusively at Tesco and One Stop stores this year.

We also spoke to Seàn Cairns, president – Global Rigid Paper and Closures at Sonoco, to learn more about the pack’s sustainability credentials in comparison to the previous design.

In other acquisition-related news, Suzano has revealed that it will terminate its plans to acquire International Paper – a move that, if it had gone ahead, may have disrupted International Paper’s all-share combination with DS Smith. The offer has been withdrawn as, according to Reuters, International Paper ‘did not engage’ with Suzano’s offer of over $15 billion in cash.

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