Sonovo Products Company (NYSE: SON) is in the packaging business, and at a market cap of over $6 billion, is one of the large players in the game. Its performance throughout the year has been stellar, which has driven its price up considerably, since the start of the year. Most recently, the company also undertook a major acquisition, to initiate a business expansion.
Sonovo’s Solid Performance
Sonovo Products Company (SON) has exceeded expectations with positive performance, as per its latest annual report. The primary reason for this had been its passing over the inflation burden to its consumers. The result was a retention of its profitability margins, whilst its core business had not seen a noticeable adverse impact. In its most recent quarter, the company boasted an impressive 40% topline growth figure. Moreover, SON stock itself has climbed by about 13% YTD, in comparison to the S&P 500’s drop of almost 19%. SON has all the markings of a winning stock.
SON’s Acquisition of Ball Metalpack
The highlight of the year was the $1.35 billion acquisition of Ball Metalpack, an expert in tinplate packaging, aerosol cans, and similar products. Considering that the entity delivered an annual revenue of $850 million, translating to almost 63% of the total deal amount, the move is extremely lucrative. It also enables an immediate business expansion for Sonovo into a related area, for which it has existing supply chain networks and industrial relations to ensure the creation of shared value. It is worth pointing out, however, that as a result of the deal, Sonovo’s net debt has jumped up substantially to nearly $2.6 billion.
Conclusion
Sonovo Products has had a good year, in terms of its business strategy, financial performance, as well as its stock price movement. Given the economic circumstances of the year, the same cannot be said for most of the company’s peers.