Sustainable packaging solutions provider Sonoco Products Company has completed the divestment of its ThermoSafe business unit to Arsenal Capital Partners for $725m.

The deal was first announced in September this year.

The transaction comprises $650m paid at closing on a cash-free, debt-free basis, with a further payment of up to $75m contingent on meeting specified performance targets for calendar year 2025.

Sonoco said net proceeds will be applied towards repaying existing borrowings.

Pro forma for the divestment and excluding any contingent consideration, Sonoco projects that expected net proceeds will lower its net leverage ratio to around 3.4 times.

Sonoco president and CEO Howard Coker said: "The completion of the sale of ThermoSafe substantially concludes Sonoco's portfolio transformation, which simplified our operations from a large portfolio of businesses into two core global business segments focused on metal and paper consumer and industrial packaging.

"Sonoco is proud of what we have accomplished in building ThermoSafe into one of the industry's leading players.

ThermoSafe, headquartered in Arlington Heights, Illinois, supplies temperature assurance technologies used in the transport of pharmaceuticals, biologics, vaccines, and other healthcare products.

Its range spans parcel shippers as well as bulk and reusable solutions designed to maintain refrigerated, frozen, and controlled room-temperature conditions. Through ISC Labs, the business offers customized design and testing, packaging solutions, and qualification and validation services aligned with regulatory standards.

In 2024, the business reported sales exceeding $240m and $50m in proforma adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).

Morgan Stanley & Co. advised Sonoco on the financial aspects of the deal, with Freshfields serving as legal counsel.

Arsenal Capital Partners was advised by Raymond James and represented legally by Kirkland & Ellis.