Caraustar Announces a Minimum 7.0% Price Increase on all Paper Tube and Core Products

Sonoco Products Company announced the completion of its acquisition of the remaining equity interest in RTS Packaging, LLC (“RTS”) from joint venture partner WestRock (NYSE:WRK) and one WestRock paper mill in Chattanooga, Tennessee. The acquisition, originally announced on November 9, 2022, will further strengthen and expand Sonoco’s 100% recycled fiber-based packaging solutions to serve growing consumer wine, spirits, food, beauty and healthcare markets. Prior to closing the transaction, Sonoco was a 35% owner in the joint venture with WestRock. With this acquisition, Sonoco adds a network of 15 operations and 1,100 employees in the U.S., Mexico, and South America. The purchase price for this acquisition was $330 million, subject to customary price adjustments. The Company funded the acquisition with borrowings under its existing credit facilities and cash on hand. After the transaction, the Company’s net debt to adjusted EBITDA ratio is less than 2.9x. The acquisition is expected to be immediately accretive to earnings per share, excluding the impact of purchase accounting adjustments.

Net sales for the first quarter were $1.30 billion, an increase of $131.9 million, or 11.2 percent, from last year’s quarter. The improvement reflects an increase in sales added by acquisitions, the positive impact of foreign exchange, higher selling prices implemented to recover rising freight, wages and operating inflation, and modest volume growth. Gross profits were a record $250.6 million in the first quarter, an increase of $27.6 million or 12.4 percent, compared with $223.0 million in the same period in 2017. Gross profit as a percentage of sales increased to 19.2 percent, compared with 19.0 percent in the same period in 2017. The gross profit percentage increase was primarily due to manufacturing and procurement productivity mostly offsetting higher raw material and other operating costs. Click Read More below for additional information.

Consumers are now actively considering the environment alongside their individual health when buying food, according to Tetra Pak’s Index 2023. These environmentally conscious consumers labelled 'Climatarians’ are willing to alter their eating habits to protect the planet. The market for healthy foods is already well established, as consumers actively seek products that will have a positive impact on their physical wellbeing. But a significant majority now take a more holistic view: 70% say that healthy products should not harm the environment, while another 54% are willing to take responsibility for the planet and change their diet to contribute to a better world. This dual focus is reflected in the rising number of consumers consciously reducing the amount of meat they eat, known as 'flexitarians', with nearly half of all consumers saying they are reducing meat intake or excluding meat altogether.