Sonoco Products Company SON has announced that it has completed its previously declared acquisition of Eviosys. This move will help Sonoco advance its portfolio transformation strategy.

Details on Sonoco-Eviosys Deal

On June 24, 2024, Sonoco announced that it had inked a deal to buy Eviosys from KPS Capital Partners for approximately $3.9 billion. Following the integration process, Eviosys will become a part of SON’s Consumer Packaging segment.

Eviosys is a leading global supplier of metal packaging, producing food cans and ends, aerosol cans and metal closures. Eviosys’ revenues for 2024 are projected at around $2.5 billion, while adjusted EBITDA is estimated at approximately $430 million.

With 44 facilities across 17 countries, Eviosys boasts the largest metal food can manufacturing footprint in the EMEA region. Combining this with Sonoco’s established presence in the United States will expand the company’s total addressable market in metal packaging to approximately $25 billion globally.

The addition of Eviosys’ highly complementary portfolio will help Sonoco expand its customer base and open up organic growth opportunities in consumer-oriented end markets. It will also boost Sonoco’s innovation and sustainability efforts.

SON’s Synergies and Financial Benefits From the Deal

This buyout will strengthen SON’s core metal packaging business and global presence while enhancing sustainability efforts. The company has identified more than $100 million of synergies expected to be realized within two years of closing.

Sonoco expects that the integration will likely result in more than $100 million of synergies. This will be realized through the optimization of sourcing, supply-chain improvements, raw material procurement savings, manufacturing footprint optimization and streamlining SG&A. The majority of the synergies are expected to be realized in the first year of ownership, with the balance realized in the following year.

The buyout will be immediately accretive to Sonoco’s adjusted earnings per share. In 2025, it is expected to contribute 25% to Sonoco’s adjusted earnings per share.

Sonoco Stock Price Performance

SON shares have dipped 1.2% in the past year against the industry’s 28.8% growth.

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SON’s Zacks Rank & Stocks to Consider

SON currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are Graham Corporation GHM, Federal Signal Corporation FSS and RBC Bearings Incorporated RBC. While GHM sports Zacks Rank #1 (Strong Buy), FSS and RBC each carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.

Graham has an average trailing four-quarter earnings surprise of 101.85%. The Zacks Consensus Estimate for GHM’s 2024 earnings is pinned at $1.03 per share, which indicates year-over-year growth of 145.2%. The company’s shares have gained 136.8% in a year.

Federal Signal has an average trailing four-quarter earnings surprise of 11.8%. The Zacks Consensus Estimate for FSS’ 2024 earnings is pinned at $3.34 per share, which indicates year-over-year growth of 29.5%. The company’s shares have gained 40% in a year.

The Zacks Consensus Estimate for RBC Bearings’ fiscal 2025 earnings is pegged at $9.80 per share. The company has a trailing four-quarter average earnings surprise of 2.5%. RBC shares have gained 37.5% in a year.

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