Sonoco To Buy WestRock’s Interest In RTS Packaging LLC For $330M Hartsville, South Carolina based Sonoco Products Com- pany, a diversified global packaging leader, announced it has entered into an agreement to purchase the remaining equity interest in RTS Packaging, LLC from joint venture partner and Atlanta, Georgia based WestRock Company and the WestRock paper mill in Chattanooga, Tennessee, for $330 million in cash. Sonoco also anticipates that it will be able to achieve $40 million of tax benefits from the transaction. Upon com- pletion of the transaction, Sonoco will own 100 percent of RTS, formerly operated as a joint venture between Sono- co (35 percent of ownership interest) and WestRock (65 percent). The transaction has been unanimously approved by
the Sonoco Board of Directors and is expected to close in the first half of 2023. RTS Packaging markets solid fiber partitions from 100 percent recycled paperboard to food and beverage customers.
RTS Packaging was formed in 1997 as a joint venture that combined the former pro- tective packaging operations of WestRock (formerly known as Rock-Tenn Company) and Sonoco to market solid fiber partitions from 100 percent recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals. For the year ending December 31, 2022, the ac- quired assets are expected to generate sales of approximately $270 million. The company expects to drive total synergies of $16 million over the next 24 months following closing. The transaction will give Sonoco full own- ership of 14 converting operations, including 10 in the United States, two in Mexico, and two in South America and one paper mill in the United States. Approximately 1,100 indi- viduals will become employees of Sonoco. "RTS Packaging has been a tremendous success for both WestRock and Sonoco. Over the last 25 years, we have worked in true partnership to build a great company,” said Howard Coker, CEO and President of Sono- co. “We are excited to acquire the remaining stake in RTS Packaging and look forward to working with Al Bosma, who will remain as the RTS leader, and the management team to continue to grow the business. “The acquisition is well-aligned with Sono- co’s long-term strategy to focus on our core integrated businesses and expand our sus- tainable consumer packaging portfolio. RTS has exposure to growing beverage markets, as well as unique capabilities to support mar- quee customers in these markets. We look forward to welcoming our RTS colleagues to the Sonoco family and building on these suc- cessful customer partnerships in the future.”
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www.boardconvertingnews.com
November 21, 2022
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