Sonoco yesterday announced that it has signed a definitive agreement to acquire Tegrant Corporation, a leading provider of highly engineered protective, temperature-assured and retail security packaging solutions, from metalmark capital for $550 million in cash. The final consideration is subject to a normal adjustment of net working capital.
According to Harris E. Deloach, jr., Sonoco Chairman and chief executive officer, the acquisition of Tegrant is the largest in Sonoco's history and will create a North American leader in multimaterial protective packaging.
Tegrant is projected to generate 2011 sales of approximately $440 million. When combined, Sonoco is projected to generate sales of approximately $5.0 billion in 2012.
The transaction is expected to be financed from existing cash and debt with an estimated credit leverage ratio of 2.2 times at closing. Sonoco intends to reduce the incremental debt using free cash flow over the next few years. The acquisition is subject to normal regulatory review and is expected to close in November 2011.
Tegrant operates more than 30 manufacturing, design and testing facilities in the United States, Mexico and Ireland and employs more than 2,000 employees.
