Sonoco announced Monday it plans to acquire Switzerland-based metal packaging company Eviosys from KPS Capital Partners for $3.9 billion. The company says this will make it “the leading metal food can and aerosol packaging manufacturer globally.”

Sonoco made its formal offer on Saturday, a securities filing shows. Sonoco has the option to pay up to $200 million of the price via stock, according to a KPS announcement. Both companies’ boards of directors have approved the deal and expect it to close by year’s end, subject to regulatory approvals.

Sonoco expects the deal will expand its total addressable market in metal packaging to approximately $25 billion globally. The company said this builds on its 2022 acquisition of Ball Metalpack and will further expand metal packaging as one of the company’s core businesses. Earlier this year, Sonoco detailed how it would reshuffle certain business units, including transitioning metal packaging into a new core business.

“The acquisition of Eviosys establishes our global leadership in metal food can and aerosol packaging, marking an exciting milestone in our strategy to scale our core strategic metal packaging platform and position Sonoco for long-term value creation,” said Sonoco CEO Howard Coker in a statement.

Sonoco said it anticipates more than $100 million of potential synergies in areas such as sourcing optimization, supply chain improvements, raw material procurement and manufacturing footprint optimization. Most of these should be realized during the first year of ownership, and the remainder would occur in the following 12 months.

Upon the transaction closing, Eviosys CEO Tomás López would remain with Sonoco and lead the company’s Europe, Middle East and Africa metal packaging business.

Sonoco also announced plans to divest ThermoSafe, its temperature-controlled packaging unit, to an unspecified buyer. It expects at least $1 billion in proceeds from this and other business divestitures in the next 12 to 18 months. The company had previously flagged that it was examining its “all other” category — which includes ThermoSafe, Paperboard Specialties and Industrial Plastic — for possible sales.

ThermoSafe is a “great innovation company” that is “in a really unique growth market and “very profitable,” said CFO Rob Dillard. This is an opportunity to add value for Sonoco shareholders by selling the business, he added. 

Eviosys solely produces metal packaging such as food cans and ends, aerosol cans, metal closures and promotional packaging. It has the largest manufacturing footprint for these products in the EMEA region, according to Sonoco, with 44 facilities and 6,300 employees across 17 countries.

In the metal packaging market, “We see value where others may not,” Coker said on a call with investors Monday morning.

Sonoco executives also said on the call that revenue distribution will be more geographically balanced following the transaction, with 57% coming from the Americas, 35% from Europe and 8% coming from the rest of the world.

Private equity firm KPS created Eviosys to acquire Crown Holdings’ EMEA food and consumer packaging business in August 2021. Crown retained a 20% ownership interest. “Crown will not be involved” in the Sonoco transaction, Coker confirmed on the call.

Sonoco estimates that Eviosys will generate $2.5 billion in revenue and $430 million in adjusted earnings before interest, depreciation, taxes and amortization in 2024.

Sonoco plans to finance this transaction with new debt as well as proceeds from an issuance of up to $500 million in equity. KPS plans to invest up to $200 million through that equity offering.