Sonoco strengthens operations with acquisition of Tegrant

10-Oct-2011 - Last updated on 11-Oct-2011 at 15:36 GMT

South Carolina-based packaging giant Sonoco has entered into an agreement to acquire Illinois-based Tegrant in a move that will strengthen its existing operations.

"The addition of Tegrant and its family of businesses significantly advances Sonoco as a protective packaging solutions leader and greatly expands the products, services and capabilities we can offer our customers," commented Harris DeLoach, Sonoco CEO.

The agreement will be completed in November 2011 with Tegrant to be bought from private equity firm Metalmark Capital for a total of $550m in cash.

Sonoco expects to generate total sales of approximately $5bn in 2012 with Tegrant’s revenue combined.

Integration and expansion

In line with this, Sonoco plans to integrate Tegrant into its existing protective packaging business in order to form a larger division.

The company expects to increase its design, engineering and testing capabilities with this acquisition as well as gain a wider geographic manufacturing and technology capability, a company spokesperson told CosmeticsDesign USA.

In addition, new packaging capabilities provided by Alloyd Brands, a part of Tegrant, will enable Sonoco to better serve its beauty customers such as P&G and L’Oreal.

Areas of growth

The markets Sonoco currently serves are forecast to grow at a CAGR of 3 to 5 percent, opening up the possibility of further expansion for the company.

“We have identified growth of our existing paper-based protective packaging business for some time and had been searching for the right company to provide us with a multi-material capability”, Cosmetics Design USA was told by a company spokesperson.

“Tegrant fit that model completely with its wide range of multi-material protective, temperature-assured and retail security packaging.”