Sonoco, one of the largest diversified global packaging companies, announced it has signed a definitive agreement to acquire 100% of the stock of Clear Lam Packaging, Inc., a family-held developer and manufacturer of flexible and forming plastic packaging films for approximately $170 million in cash.

According to an SEC filing, to help fund the deal Sonoco entered into a new $750 million bank credit facility which replaces the existing credit facility entered into October 2, 2014, and reflects substantially the same terms and conditions. Included in the new facility are a $500 million five-year revolving credit facility, and a $250 million five-year term loan. Based on the pricing grid in the Credit Agreement and the registrant’s current credit ratings, a London Interbank Offered Rate (LIBOR) borrowing has an all-in drawn margin of 112.5 basis points. Borrowings under the Credit Agreement are pre-payable at any time at the discretion of the registrant and the term loan has annual amortization payments totaling $12.5 million.

Consistent with prior facilities, the $500 million revolving credit facility will continue to support the registrant’s $350 million commercial paper program. The $250 million term loan repaid the $150 million term loan entered into March 13, 2017 and $100 million was used to partially fund the acquisition of Clear Lam Packaging, Inc.

The lenders under the Credit Agreement are: Bank of America, N.A.; Wells Fargo Bank, National Association; JPMorgan Chase Bank, N.A.; U.S. Bank National Association; TD Bank, N.A.; The Bank of Tokyo-Mitsubishi UFJ, Ltd; Deutsche Bank AG, New York Branch; and The Bank of New York Mellon. Bank of America is the administrative agent and Wells Fargo, JPMorgan, and U.S. Bank are co-syndication agents. Merrill Lynch Pierce, Fenner and Smith Incorporated, J.P. Morgan, U.S. Bank, and Wells Fargo Securities LLC are joint lead arrangers and joint bookrunners.

According to Jack Sanders, Sonoco president and chief executive officer, the acquisition of Clear Lam will further build on Sonoco’s strategy of expanding its global Flexible Packaging and Thermoforming Plastics operations to provide offerings serving the fast-growing perimeter of grocery and retail food stores.

“The addition of Clear Lam will significantly expand our Flexible Packaging and Thermoforming Plastics operations as we will be able to develop, produce and convert high barrier flexible and forming film structures to package fresh and prepared food products purchased in the growing store perimeter,” said Sanders. “As an example, Clear Lam complements our recent acquisition of Peninsula Packaging’s thermoforming operations by being able to produce barrier flexible film lidding that extends shelf life, is resealable and provides a complete packaging solution to our fresh fruit and vegetable customers.”