Sonoco has signed a definitive agreement to acquire Weidenhammer Packaging Group for €286m ($383m) in cash.
The family-owned company, based in Hockenheim, Germany, has approximately 1,100 employees and 13 production facilities; five in Germany, one in Belgium, France, Greece, The Netherlands, UK, US, Chile and Russia.
In addition to producing composite cans, drums and luxury tubes, Weidenhammer produces rigid plastic containers using thin-walled injection molding technology with in-mold labeling.
A spokesman for Weidenhammer confirmed the announcement but refused to comment any further on the deal.
"After almost 60 years of successful business operations, we are convinced the merger with Sonoco will open up opportunities for our business, our customers and partners, as well as to our employees," said Ralf Weidenhammer, managing director,Weidenhammer, in a statement.
The acquisition is expected to increase Sonoco's global consumer-related packaging and services business to approximately $2.8bn in annual sales or 53% of the company's combined revenue of $5.3bn.
It is expected to increase Sonoco's net sales in Europe to 21% of total sales.
Weidenhammer Packaging's projected 2014 sales are expected to be approximately €244m ($327m), with projected EBITDA approximately €42m ($56m).
Jack Sanders, president/CEO, Sonoco, the deal will create a strong presence in the emerging markets of Southeast Asia, China, Eastern Europe and South America.
Sonoco intends to fund the acquisition through a combination of existing cash and debt with an estimated combined net credit leverage ratio of 1.75 times at closing.
In 2015, the company intends to use free cash flow for debt repayment. The acquisition is subject to governmental regulatory review and is expected to close in the fourth quarter of 2014.