DENMARK – US-based diversified packaging company Sonoco has signed a definitive agreement to acquire Skjern, a privately owned paper manufacturer from Denmark for US$88 million.
The acquisition will help Sonoco expand its customer production capacity and convert operations throughout Europe and neighboring areas.
Sonoco said the buyout was unanimously approved by its Board of Directors. Expected to be completed in the fourth quarter of 2022, the deal is subject to customary closing conditions.
Sonoco President and CEO Howard Coker said: “This acquisition builds on Sonoco’s previously articulated strategy to invest in our core businesses while capitalizing on the growing market for sustainable paper and packaging products in Europe.
“Skjern has a strong reputation for high-quality output from efficient and low emission operations, which aligns well with Sonoco’s overall commitment to a circular economy and the reduction of greenhouse gases.”
Founded in 1965, Skjern produces high-grade paperboard made entirely from recycled paper for rigid paper containers, tubes, cores, and other uses.
The firm has established strong environmental initiatives for reducing CO2 emissions and utilizing renewable energy sources. Its operations are fuelled by a biomass boiler, which lessens its dependency on natural gas.
The company is anticipated to reach US$50 million in annual revenues in 2022, and it is anticipated that the deal would instantly increase profits per share and cash flow.
Sonoco expects the deal to be immediately accretive to both its earnings per share and cash flow.
Coker added: “With this acquisition, Sonoco is better positioned to be a trusted provider to new and existing customers and to further accelerate organic growth in Europe. We warmly welcome the Skjern team to the Sonoco family.”
According to Sonoco, Skjern’s high-quality product from effective and low-emission operations complements its aim of lowering greenhouse gas emissions.
The acquisition is in line with the packaging firm’s goal to develop in Europe’s growing market for sustainable paper and packaging goods while investing in its core operations.
In April this year, the firm acquired the remaining one-third interest in its Brazilian flexible packaging joint venture, Sonoco do Brasil Participacoes.
Sonoco do Brasil Participacoes is one of Brazil’s major converters of foil-based flexible packaging, with rotogravure printing and advanced lamination procedures.
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