Sonoco Completes $170 Million Acquisition of Clear Lam Packaging, Inc.

SEATTLE (Scrap Monster): Hartsville-headquartered global packaging firm Sonoco has announced that it has completed the acquisition of 100% stake in Clear Lam Packaging, Inc. The acquisition of the family-owned flexible and forming plastics packaging films manufacturer was done through a $170 Million all-cash deal. The deal is expected to aid Sonoco’s efforts to expand its footprint into packaging of various food categories.

According to Sonoco press release, the company has made use of available credit facilities, including a new $750 million bank credit facility to finance the transaction. The new facility includes a $500 million, five-year revolving credit facility. It also includes a $250 million five-year term loan, which provides partial funding of the Clear Lam acquisition deal. The new credit facilities are under the same terms and bank group, the press release noted.

The merger is unlikely to bring major changes to Clear Lam’s organizational structure. Clear Lam President and CEO James Sanfilipoand other key members of its management team are expected to become part of the Sonoco family. Furthermore, the estimated sales of nearly $140 million per annum will henceforth contribute to give big boost to the financials of Sonoco’s Consumer Packaging segment.

Rob Tiede, Sonoco executive vice president and chief operations officer noted that the acquisition deal will help Sonoco to leverage Clear Lam’s expertise in modified atmosphere packaging. The addition of the company’s portfolio of multi-layer film structures will help Sonoco to rapidly expand its presence in innovative food products packaging solutions. In addition, the deal will help Sonoco to better serve its existing customers and expand its customer base by offering new solutions for packaging perishable foods. The deal offers tremendous market growth potentials, he added. Earlier, the Clear Lam Directors Board had arrived at a decision to sell the company on the firm belief that the combined entity would be able to achieve greater success by delivering better solutions.

Sonoco had recently declared financial results for the second quarter of 2017. The revenue had jumped higher by 2.9% to $1.24 billion when matched with the same quarter in 2016. The company had posted $0.71 EPS for the quarter, as compared with $0.73 EPS during the same quarter last year. The net margin of the company had stood at 5.61%. Furthermore, Sonoco had revised its Q3 guidance to $0.71-$0.77 EPS and its full year 2017 guidance to $2.73-$2.80 EPS.