Sonoco agrees to acquire Ball Metalpack

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Acquisition Completes Sonoco’s Largest Consumer Packaging Franchise

Transaction aimed at strengthening cash flow and profits
Further expands the company’s sustainable packaging portfolio

HARTSVILLE, SC, December 20, 2021 (GLOBE NEWSWIRE) – Sonoco (NYSE: SON), one of the world’s largest sustainable packaging companies, today announced that it has entered into a definitive agreement to acquire Ball Metalpack, the a leading manufacturer of sustainable metal packaging for food and household products and the largest aerosol producer in North America, for $ 1.35 billion in cash before factoring in tax benefits with a net present value estimated at around $ 180 million. Ball Metalpack is a joint venture owned by Platinum Equity (51%) and Ball Corporation (NYSE: BLL) (49%).

Previously a member of Ball Corporation, Ball Metalpack, headquartered in Broomfield, Colorado, was established in 2018 and has over 100 years of experience in the production of food and aerosol tin cans, as well as closures and packaging components from eight operations in Canton and Columbus. , Ohio; Milwaukee and Deforest, Wisconsin; Chestnut Hill, Tennessee; Horsham, Pennsylvania; and Oakdale, California. Ball Metalpack is expected to generate approximately $ 850 million in revenue and $ 111 million in adjusted EBITDA in 2021.

“This acquisition is part of our strategy to invest in Sonoco’s core businesses, as it complements our largest consumer packaging franchise – our iconic global paper boxes and closures business. Additionally, it further expands our already established sustainable packaging portfolio with metal packaging, which is the most recycled packaging substrate in the United States, ”said Howard Coker, President and CEO of Sonoco. “We have a long relationship with the Ball Metalpack team, including as the owner and operator of two of their manufacturing plants in Canton. With a comprehensive and innovative product portfolio that has received significant recent investments in new technologies and capabilities, we believe the addition of Ball Metalpack will further strengthen our generation of stable cash flow while driving a solid increase in earnings. “

“Ball Corporation values ​​its long-standing relationship with Platinum Equity and Sonoco. We are thrilled with today’s Ball Metalpack news and the value we have collectively created in the tinplate packaging industry. The sale of the joint venture is a positive move and the cash proceeds received from Ball’s minority stake will further benefit our shareholders, “said John A. Hayes, Chairman and CEO.” This agreement further enhances Ball’s ability to return shareholder value through share buybacks and dividends, and to make EVA-enhancing investments. “

“Ball Metalpack has undergone a significant transformation over the past three years and is now poised to open a new chapter,” said Louis Samson, Platinum Equity Partner. “We have made substantial investments in equipment, technology and human capital, so the company is very well positioned for continued growth, and we believe Sonoco is the perfect home for the future.

Once the transaction is completed, Sonoco expects the financial results of the acquired business to be published in the Company’s Consumer Packaging segment. Jim Peterson, who is CEO of Ball Metalpack and has over 15 years of leadership experience in the metal packaging industry, will continue to lead the company with a permanent management team that has over 90 years of experience. experience.

There are no expected changes in operations or customer relationships as a result of the transaction.

Closing of the transaction is subject to the satisfaction of customary closing conditions, including regulatory review, and is expected to be completed in the first quarter of 2022.

transaction details
The purchase price of the acquisition is $ 1.35 billion in cash, subject to customary adjustments including working capital, cash and debt. With the acquisition, Sonoco expects to realize tax benefits with an estimated net present value of approximately $ 180 million, primarily due to the increased tax base of acquisition assets and deferrals of net operating losses. In addition, Sonoco expects to achieve at least $ 20 million in annual synergies from purchases and savings in general and administrative costs within three years. The transaction multiple, adjusted for tax benefits and synergies, is expected to be approximately 8.9 times Ball Metalpack’s 2021 adjusted EBITDA. The acquisition is expected to have an immediate impact on earnings per share in 2022, with a further increase expected in 2023 thanks to synergies, new business development and productivity improvements resulting from recent investments.

As part of the transaction, Sonoco secured a commitment from JPMorgan Chase Bank, NA for a $ 1.0 billion senior unsecured bridge credit facility, subject to customary terms. The Company currently intends to replace the bridge loan prior to the closing of the acquisition with permanent financing, which may include the issuance of debt securities and a term loan facility.

Sonoco is committed to maintaining its investment grade credit rating and plans to focus its increased cash flow to support deleveraging within two years, while continuing to return cash to shareholders by increasing dividends from the increase. benefits.

Advisers
JP Morgan Securities LLC is acting as exclusive financial advisor to Sonoco and Freshfields Bruckhaus Deringer LLP as legal advisor. Goldman Sachs is financial advisor to Ball Metalpack in connection with the sale to Sonoco. Latham & Watkins LLP is legal counsel to Platinum Equity on the transaction. Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel to Ball Corporation.

Investor conference call webcast
Sonoco management will host a conference call and webcast with investors to discuss this transaction in more detail starting at 10:00 am ET today. The live webcast link and corresponding presentation can be accessed at http://investor.sonoco.com. The dialing number for the conference call is (844) 229-9562 and for international calls + (574) 990-0804. The conference call passcode is 9874549 for US and international calls. A telephone replay of the event will be available starting at 1 p.m. ET today for U.S. callers at 855-859-2056 and international callers at + 404-537-3406. The replay passcode for US and international calls is 9874549. The archived phone replay will be available until December 30, 2021.

Forward-looking statements
This press release and the accompanying investor presentation include forward-looking statements. These forward-looking statements are based on current expectations, estimates and projections regarding Sonoco and Ball Metalpack, the industry and certain assumptions made by management. This information includes, without limitation, discussions regarding directions and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives regarding the future financial and operational performance of Sonoco and Ball Metalpack. These statements do not constitute guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict, in particular the ability of the parties to complete the transaction on time, the ability of the parties to meet the closing conditions at the transaction and Sonoco’s ability to realize the benefits and synergies expected from the transaction. Therefore, actual results may differ materially from those expressed or anticipated in these forward-looking statements.

Additional information regarding some of the factors that could cause results to differ materially is included in the Company’s reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. These reports are available from the public reference facilities of the Securities and Exchange Commission and its website, sec.gov, and from the Company’s investor relations department and the Company’s website, www.sonoco.com.

About Sonoco
Founded in 1899, Sonoco (NYSE: SON) is a global supplier of consumer, industrial, healthcare and protective packaging. With annualized net sales of approximately $ 5.5 billion, the company has approximately 19,000 employees working in more than 300 operations in 34 countries, serving some of the world’s best-known brands in some 85 countries. Sonoco is committed to creating sustainable products, services and programs for our customers, employees and communities that support our corporate goal of Better packaging. Better life. The company was named one of Fortune’s World’s Most Admired Companies for 2021 as well as Barron’s 100 Most Sustainable Companies for the third year in a row. For more information visit www.sonoco.com.

About Ball Metalpack
Ball Metalpack provides innovative and sustainable steel packaging solutions for food products and aerosols in North America. With approximately 1,300 employees, the privately held company is headquartered in Broomfield, Colorado, with eight factories in the United States. Ball Metalpack was formed in June 2018 as a joint venture between majority owner Platinum Equity and Ball Corporation. More information is available at www.metalpack.com.

CONTACT: Contact: Roger Schrum +843-339-6018 [email protected]


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