Global sustainable packaging company Sonoco Products has reached an agreement to divest its Protective Solutions packaging business for approximately $80m in cash.
The segment is being sold to private equity company Black Diamond Capital Management.
This move aligns with the company’s strategy to optimise its portfolio via a focus on its core businesses.
The Protective Solutions unit, a key player in North America’s packaging sector, specialises in manufacturing components from materials such as expanded polypropylene and polystyrene foam.
It serves a diverse range of industries, including the car and electronics segments.
The business, which reports its financial results in Sonoco’s All Other Businesses segment, operates nine manufacturing facilities with approximately 900 employees.
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In 2023, the segment reported net sales of roughly $170m.
Sonoco president and CEO Howard Coker said: “We believe this divestiture builds on our previously articulated strategy to divest non-core assets and to refocus our efforts on core businesses to achieve greater scale, profitability, and market leadership.
“I personally would like to thank the entire Protective Solutions team for their years of delivering quality products and outstanding customer service on behalf of Sonoco. We know their knowledge, experience, and leadership will be greatly valued by their new owner and wish the entire team much-continued success in the future.”
Raymond James acted as the financial advisor while Jones Day offered legal counsel to Sonoco for the transaction.
Greenberg Traurig meanwhile, served as the legal adviser for Black Diamond Capital Management.
The transaction, subject to customary closing conditions, is expected to be finalised in the first half (H1) of 2024.
Last month, Sonoco acquired 100% of the shares of Inapel Embalagens, a manufacturer of mono and multilayer materials for flexible packaging in Brazil.