Crown Holdings expects to gain approximately $300 million in proceeds in the sale of European metal packaging supplier Eviosys to Sonoco, the can-maker detailed in a Tuesday earnings release. The deal, which Sonoco valued at $3.9 billion, was announced a month ago and is expected to close by the end of 2024.
Crown has had a 20% stake in Eviosys, which was included as part of the agreement, the company said. That stake stems from the origins of Eviosys. Private equity firm KPS Capital Partners, which is Eviosys’ current owner, created the company to acquire Crown’s European tinplate business in 2021. At the time, Crown sold the majority of the business for approximately 1.9 billion euros.
“It is likely that we would use the bulk of those proceeds to buy back shares,” said Crown CEO Tim Donahue during a Tuesday earnings call.
Crown has a new long-term net leverage target of 2.5x. That compares to 4.0x in the second quarter of 2023 and 3.2x in the second quarter of 2024.
Donahue elaborated further that even if Crown bought back no stock between now and the end of 2025, it would be at or slightly below that target by the end of 2025. That said, with the planned buybacks, “I don’t think we need to race to get the [2.5x]; it is a target, and we can get there over time, while at the same time accomplishing the buy-back of shares and having that accrete to the remaining shareholders.”
Crown reported second-quarter earnings results on Tuesday. Net sales in the quarter were $3.04 billion, down from $3.12 billion the prior year. The company said higher global beverage can shipments were offset by lower material costs and unfavorable foreign currency. Net income was $174 million, up from $157 million the prior year.
