Sonoco has reached an agreement to acquire the remaining 70% interest in paper-based cones and tubes manufacturer Conitex Sonoco for around $133m.
Formed in 1998, Conitex Sonoco is a joint venture between Sonoco’s former North America textile cone business and Spanish paperboard and paper-based packaging products provider Texpack.
Last year, the joint venture had total sales of approximately $245m and produced more than 300,000 tonnes of uncoated recycled paperboard, which was used to produce approximately 1.4 billion tubes and cones for the global spun yarn industry. The company also produces adhesives, flexible intermediate bulk containers and corrugated pallets.
Sonoco president and CEO Rob Tiede said: “The Conitex Sonoco relationship has been very successful over the past 20 years.
“We see even further opportunity to grow Sonoco’s existing global paper-based tube and cone business through this combination, especially in faster-growing emerging markets in Asia where we will be substantially increasing our manufacturing presence while more than doubling our current annual sales in the region.
“We welcome Conitex Sonoco’s nearly 1,250 employees and are excited by the prospects for further building strong relationships with our combined customers in Asia, the Americas and Europe by offering innovative packaging solutions in paperboard, textile carriers and other value-added products.”
The company operates through 13 manufacturing locations in ten countries, including four paper mills and seven cone and tube converting operations as well as two other production facilities.
The transaction is subject to normal international regulatory reviews and is expected to close in the third quarter of this year.
The acquisition of Conitex Sonoco will be modestly accretive to Sonoco’s earning in 2018. Conitex Sonoco’s Chief Operating Officer Michel Schmidlin and members of his global leadership team will remain with Sonoco, and there are no expected changes to customer relationships. When the transaction is completed, Conitex Sonoco’s financial results will be reported within Sonoco’s Paper/Industrial Converted Products segment.