Sonoco Products Company SON completed the acquisition of Peninsula Packaging Company for $ 230 million. The buyout will significantly boost Sonoco’s thermoforming packaging capabilities.
Founded in 2001, Exeter, CA-based Peninsula Packaging is owned by a fund managed by Odyssey Investment Partners, LLC. It is a leading manufacturer of thermoformed packaging for fresh fruit and vegetables. The company has five manufacturing facilities, four in the U.S. and one in Mexico.
Last month, Sonoco had inked an all-cash deal to acquire Peninsula Packaging. The acquisition is expected to almost double Sonoco’s thermoforming business. It also comes at an opportune time when the perimeter of grocery stores is expanding with consumer popularity.
Sonoco Products Company Price
Sonoco Products Company Price | Sonoco Products Company Quote
The acquisition is in sync with Sonoco’s ‘Grow and Optimize’ strategy. The company will now enjoy a solid packaging position serving fresh food products, along with its existing offerings in the center of the store, including those serving a range of frozen and shelf-stable foods.
Sonoco financed the transaction with a combination of cash and a $ 150-million three-year term loan. Peninsula Packaging’s financial results will be added to Sonoco’s Consumer Packaging segment. The business will operate as the Peninsula brand of thermoformed packaging products within Sonoco Plastics division’s global operations.
Throughout 2017, Sonoco intends to remain focused on accelerating organic growth, improving productivity and using the company’s robust financial position to make strategic acquisitions. It has several key growth projects planned for 2017.
Moreover, Sonoco is poised to gain from the expansion of global production units, product launches, growth projects and investment in capacity.
However, Sonoco has underperformed the Zacks classified Containers-Paper/Plastic sub-industry in the last one year with respect to price performance, mainly due to poor organic growth. The stock gained around 10.2%, while the industry rose 15.5% over the same time frame.
Sonoco currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same space include Net 1 UEPS Technologies, Inc. UEPS , Casella Waste Systems, Inc. CWST and Deere & Company DE . All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Brady Corporation has a positive average earnings surprise of 14.10% for the last four quarters. Casella Waste generated a remarkable positive average earnings surprise of 165.21% over the trailing four quarters. Deere & Company has delivered an average positive earnings surprise of 60.50% in the past four quarters.
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Sonoco Products Company (SON): Free Stock Analysis Report
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