Target: Tegrant Corp.
Price: $550 million
Buyer: Sonoco Products Co.
Seller: Metalmark Capital
Financial Adviser: Macquarie Capital (Sonoco), Sagent Advisors (Tegrant)
Industrial and consumer packaging company Sonoco Products Co. will buy Tegrant Corp. from sponsor
DeKalb, Illinois-based Tegrant, the maker of Protexic and ThermoSafe brands, serves the consumer electronics, automotive, pharmaceuticals and food industries. The company operates more than 30 manufacturing, design and testing facilities in the United States, Mexico and Ireland and employs more than 2,000 employees. It is expected to generate sales of about $440 million in 2011.
New York-based MetalMark, formerly known as
“Sonoco’s combined protective packaging businesses will represent approximately 11 percent of Sonoco’s projected 2012 sales and further enhance our ability to grow in both consumer and industrial markets globally,” CEO Harris DeLoach said in a statement.
The acquisition, which will be funded by cash and debt, is expected to close in November. Sonoco, whose largest customer is Procter & Gamble, last acquired Robinson Paperboard Packaging Ltd in a deal that is expected to add $10 million in annual sales.
Macquarie Capital served as financial adviser to Sonoco, while Tegrant was represented by Sagent Advisors.
Consolidation among packaging companies has been building in a rapid pace due to the shift from metals to plastics. This year, almost all the big names in the industry have made billion dollar acquisitions or have been buyout targets.
International Paper is to buy Temple Inland for $3.7 billion, while Sealed Air bought Diversey Holdings for $2.9 billion and Rock-Tenn bought Smurfit-Stone for $3.5 billion. Graham Packaging Co. was taken private by Reynolds, part of New Zealand billionaire Graeme Hart’s Rank Group after Silgan lost out on a bidding war, for $1.68 billion.
(A. Ananthalakshmi is a correspondent for Reuters in Bangalore.)