Industrial and consumer packaging company Sonoco last week completed the purchase of the fiber containers and industrial plastic businesses of Austell, Ga.-based Caraustar Industries, Inc.
Terms of the transaction were not made public but, according to Sonocos Vice President for Investor Relations and Corporate Affairs Robert Schrum, annual revenues from the acquisition will increase Sonocos approximately $4 billion in annual sales by $50 million. In addition, the companys profitability is expected to modestly increase in 2008. Proceeds from the sale of the assets will be used to reduce debt, Caraustar said in a statement.
The acquisition first strengthens Sonocos existing fiber and plastic cartridge business, which provides packaging for many of the most recognized adhesives and sealants and lubricating grease companies, Schrum told Lube Report. [It] also provides us with additional production capabilities and a new customer base. We will leverage our production, technology and services capabilities to provide our customers with greater flexibility while maintaining the level of service that they expect.
Through the buyout, Sonoco acquires six of the recycled paperboard and packaging companys manufacturing facilities that include fiber container operations in Covington, Ga., Orrville, Ohio, St. Paris, Ohio, and Stevens Point, Wis., and plastic container operations in New Smyrna Beach, Fla., and Union, S.C. The 260 workers at those production sites will now become Sonoco employees.
The fiber container business produces a variety of spiral-wound recycled paperboard containers used to package lubricating grease, adhesives and sealants and a range of food and non-food products. The plastics business produces plastic cores for the textile, film and carpet industries as well as adhesive and sealants packaging components.
Headquartered in Hartsville, S.C., Sonoco manufactures rigid paperboard containers that include round and shaped spiral-wound, recycled paperboard cans, fiber cartridges, single-wrap paperboard containers and large pails for food and non-food markets. The company also produces plastic containers and products using blow-molding, extrusion, injection-molding and thermoforming. Its approximately 17,700 employees are based at more than 300 locations worldwide.
An integrated manufacturer of converted recycled paperboard, Caraustar serves the four principal recycled boxboard product end-use markets: tubes and cores, folding cartons, gypsum facing paper and other miscellaneous specialty paperboard products.
Caraustar President and Chief Executive Officer Michael Keogh, said, The sale of these assets reflects our objective to exit non-core businesses. The transaction brings us closer to the completion of our transformation plan and our commitment to focus on growing our core businesses and achieving sustained profitable growth.