Sonoco Buys TEQ
Sonoco buys TEQ.
Sonoco buys Thermoform Engineered Quality from ESCO Technologies for $187 million.
TEQ is a global manufacturer of thermoformed packaging in the healthcare, medical device, and consumer markets. It operates three thermoforming and extrusion facilities in the United States, a thermoforming operation in the United Kingdom, and a thermoforming and molded-fiber facility in Poland. Each location has the latest cleanroom capabilities for the creation of sterile barrier packaging systems for pharmaceuticals and medical devices. TEQ also makes recyclable, molded-pulp-fiber packaging and thermoformed plastic packaging for European consumer products.
Rob Tiede of Sonoco said: ‘Recent studies value the global healthcare packaging market at $33 billion, with healthy growth expected for the future. Increased life expectancy, the steady introduction of new products from medical device manufacturers and pharmaceutical companies, combined with requirements for improved safety and compliance, are driving market growth. TEQ provides a strong platform to further expand Sonoco’s growing healthcare packaging business, which includes our best-in-class ThermoSafe™ temperature-assured pharmaceutical packaging, injection-molded vials, multi-cell cuvettes and appliances, thermoformed trays for medical devices and over the counter medical products, and our Alloyd heat-sealing equipment for commercial medical applications.’
Randy Loga of TEQ said: ‘The US and Europe will remain the largest consumers of healthcare packaging as new sophisticated therapies with specialized packaging needs continue to be introduced. Surgical operations are also increasing due to a growing aging population, and with that comes the demand for more medical devices, which should strengthen the segment for the foreseeable future. TEQ’s history of growth mirrors the growth in healthcare spending and medical device use, and we look forward to joining Sonoco in further expanding our capabilities to meet our customers’ future needs.’
Vic Richey of ESCO said: ‘With this divestiture, we are delivering on our commitment to drive enhanced capital efficiency as this transaction streamlines our business, simplifies our portfolio, and allows us to focus on our three core operating segments. As we’ve done in the past, we will continue to actively optimize our operations and reduce our capital intensity with the goal of increasing our ROIC, thereby creating added shareholder value. I want to personally thank the dedicated management teams and employees of the Technical Packaging business for their contributions to ESCO over the years and wish them the best in their future as part of Sonoco.’
Gary Muenster of ESCO said: ‘Net proceeds from the sale will be used to pay down company debt, thereby increasing our liquidity and enhancing our ability to complete future acquisitions within our core businesses. Later this fiscal year, we plan to use a part of the net proceeds to fully fund, terminate, and annuitize the defined benefit pension plan now maintained by the Company. Annuitizing this non-strategic liability through an insurance company will cut both equity market risk and interest rate volatility, thereby reducing costs and eliminating future cash payments. The Company froze the defined benefit plan in 2003 and no added benefits have been accrued since that date.’
Stifel served as financial advisor to ESCO. Bryan Cave Leighton Paisner served as legal advisor.
Sonoco buys Thermoform Engineered Quality from ESCO Technologies for $187 million.
TEQ is a global manufacturer of thermoformed packaging in the healthcare, medical device, and consumer markets. It operates three thermoforming and extrusion facilities in the United States, a thermoforming operation in the United Kingdom, and a thermoforming and molded-fiber facility in Poland. Each location has the latest cleanroom capabilities for the creation of sterile barrier packaging systems for pharmaceuticals and medical devices. TEQ also makes recyclable, molded-pulp-fiber packaging and thermoformed plastic packaging for European consumer products.
Rob Tiede of Sonoco said: ‘Recent studies value the global healthcare packaging market at $33 billion, with healthy growth expected for the future. Increased life expectancy, the steady introduction of new products from medical device manufacturers and pharmaceutical companies, combined with requirements for improved safety and compliance, are driving market growth. TEQ provides a strong platform to further expand Sonoco’s growing healthcare packaging business, which includes our best-in-class ThermoSafe™ temperature-assured pharmaceutical packaging, injection-molded vials, multi-cell cuvettes and appliances, thermoformed trays for medical devices and over the counter medical products, and our Alloyd heat-sealing equipment for commercial medical applications.’
Randy Loga of TEQ said: ‘The US and Europe will remain the largest consumers of healthcare packaging as new sophisticated therapies with specialized packaging needs continue to be introduced. Surgical operations are also increasing due to a growing aging population, and with that comes the demand for more medical devices, which should strengthen the segment for the foreseeable future. TEQ’s history of growth mirrors the growth in healthcare spending and medical device use, and we look forward to joining Sonoco in further expanding our capabilities to meet our customers’ future needs.’
Vic Richey of ESCO said: ‘With this divestiture, we are delivering on our commitment to drive enhanced capital efficiency as this transaction streamlines our business, simplifies our portfolio, and allows us to focus on our three core operating segments. As we’ve done in the past, we will continue to actively optimize our operations and reduce our capital intensity with the goal of increasing our ROIC, thereby creating added shareholder value. I want to personally thank the dedicated management teams and employees of the Technical Packaging business for their contributions to ESCO over the years and wish them the best in their future as part of Sonoco.’
Gary Muenster of ESCO said: ‘Net proceeds from the sale will be used to pay down company debt, thereby increasing our liquidity and enhancing our ability to complete future acquisitions within our core businesses. Later this fiscal year, we plan to use a part of the net proceeds to fully fund, terminate, and annuitize the defined benefit pension plan now maintained by the Company. Annuitizing this non-strategic liability through an insurance company will cut both equity market risk and interest rate volatility, thereby reducing costs and eliminating future cash payments. The Company froze the defined benefit plan in 2003 and no added benefits have been accrued since that date.’
Stifel served as financial advisor to ESCO. Bryan Cave Leighton Paisner served as legal advisor.
Comments
Post a Comment