In an $80 million cash deal, Sonoco Products Co. is selling its Protective Solutions unit to private equity firm Black Diamond Capital Management LLC.
Officials with Sonoco in Hartsville, S.C., said that the Protective Solutions unit "is one of North America's premier manufacturers of molded expanded polypropylene and expanded polystyrene foam components." They added that the business serves automotive, power sports, impact surfaces, HVAC and other industrial end markets.
The unit employs 900 at nine plants and had sales of $170 million in 2023. Officials said that the sale — expected to close in the first half — "is the result of Sonoco's continuing evaluation of its business portfolio and is consistent with its strategic and investment priorities."
"We believe this divestiture builds on our previously articulated strategy to divest non-core assets and to refocus our efforts on core businesses," President and CEO Howard Coker said.
Stamford, Conn.-based Black Diamond has more than $10 billion in assets under management. Plastics-related firms in its portfolio include materials makers Polynt Group of Italy and Vertellus of Indianapolis.
For Sonoco, the sale follows the closing of packaging plants in Exeter, Calif., and Fremont, Ind., that eliminated more than 350 jobs in late 2023. In the first nine months of 2023, Sonoco's sales were down 8 percent to $5.15 billion, but the firm's profit grew 7 percent to $394 million. The firm had $750 million in North American thermoforming sales in the most recent Plastics News ranking, placing at No. 5 with an estimated 145 thermoforming lines.
On Wall Street, Sonoco's per-share stock price was near $50 in late October, but had recovered to $58.40 in late trading Jan. 30. The 125-year-old firm is a major global packaging supplier that employs 22,000 at more than 300 locations.