Sonoco strengthens operations with acquisition of Tegrant

By Pooja Kondhia

- Last updated on 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​.”

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