Sonoco to Reduce Debt and Boost Portfolio With ThermoSafe Divestment

Sonoco Products Company SON announced that it has inked a definitive agreement with Arsenal Capital Partners to sell the ThermoSafe business unit. This move is in sync with SON’s portfolio transformation and debt reduction efforts.

Sonoco’s Strategic Move to Sell ThermoSafe

ThermoSafe provides packaging solutions for temperature-sensitive items. The business offers a wide range of innovative products, including bio-based insulation and reusable technologies and reported around $240 million in sales in 2024. Headquartered in Arlington Heights, it operates across the Americas, EMEA and Asia and has 900 employees. 

The sale of ThermoSafe will mark another significant step in Sonoco’s ongoing portfolio optimization, ensuring a more streamlined operation with two core business segments, Global Metal and Fiber Packaging, that are industry leaders with long-term sustainability. 

Arsenal Capital Partners is a private equity investment firm specializing in building top-ranked industrial growth and healthcare companies. The deal is set at a total purchase price of up to $725 million, with $650 million to be paid on closing on a cash-free and debt-free basis. The additional $75 million will be paid if specific performance targets are met by the end of 2025.

After the completion of the deal, Sonoco expects its net leverage ratio to drop to around 3.5x, excluding potential additional payments.

SON’s Ongoing Efforts to Streamline Portfolio

To improve the long-term profitability and return capital to its shareholders, Sonoco has been simplifying the business portfolio and focusing on larger and core business units. In April 2025, Sonoco completed the previously announced sale of its Thermoformed and Flexibles Packaging business to TOPPAN Holdings Inc. for $1.8 billion on a cash-free and debt-free basis.

SON continues to work on commercial, operational and supply-chain excellence programs, intended to shift the mix of its business toward higher-valued products and increase productivity. Its strategic pricing initiatives will also aid results.

Sonoco Stock’s Price Performance

SON’s shares have lost 11.4% in the past year compared with the industry’s 10.8% decline.

SON’s Zacks Rank & Stocks to Consider

SON currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are Flowserve Corporation FLS, Life360, Inc. LIF and Crane Company CR. FLS sports a Zacks Rank #1 (Strong Buy), while LIF and CR have a Zacks Rank #2 (Buy) each at present. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Flowserve’s 2025 earnings is pegged at $3.34 per share, indicating a year-over-year increase of 27%. Flowserve’s shares have gained 14.5% in a year.

Life360 delivered an average trailing four-quarter earnings surprise of 487%. The Zacks Consensus Estimate for LIF’s 2025 earnings is pinned at 29 cents per share, which indicates a year-over-year upsurge of 583%. Life360’s shares have skyrocketed 137.8% in a year.

Crane Company delivered an average trailing four-quarter earnings surprise of 7.5%. The Zacks Consensus Estimate for CR’s 2025 earnings is pinned at $5.77 per share, which indicates year-over-year growth of 18.2%. The company’s shares have gained 25.8% in a year.

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This article originally published on Zacks Investment Research (zacks.com).

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