Transcontinental Inc. (TSX: TCL.A, TCL.B) has closed the previously announced acquisition of the business of Coveris Americas from Coveris Holdings S.A., a portfolio company of Sun Capital Partners, Inc. for US $1.32 billion or CDN $1.72 billion.
Chicago, Illinois based Coveris Americas manufactures a variety of flexible plastic and paper products, including rollstock, bags and pouches, coextruded films, shrink films, coated substrates and labels. Coveris Americas operates 21 well invested production facilities in the United States, Canada, Ecuador, Guatemala, Mexico, the United Kingdom, New Zealand and China.
Coveris Americas’ 3,100 employees, the majority of whom are located in North America and Latin America, will join TC Transcontinental.
photo credit: Coveris
Transcontinental Inc. completes the transformational acquisition of Coveris Americas and becomes a North American leader in flexible packaging
Montréal, May 1, 2018 – Transcontinental Inc. (TSX: TCL.A TCL.B) (“TC Transcontinental” or the “Corporation”) is pleased to announce that it has completed the previously announced acquisition (the “Acquisition”) of the business of Coveris Americas, a business previously held by Coveris Holdings S.A. Headquartered in Chicago, Illinois, Coveris Americas manufactures a variety of flexible plastic and paper products, including rollstock, bags and pouches, coextruded films, shrink films, coated substrates and labels. Coveris Americas operates 21 well invested production facilities in the United States, Canada, Ecuador, Guatemala, Mexico, the United Kingdom, New Zealand and China. With this Acquisition, TC Transcontinental welcomes 3,100 employees, the majority of whom are located in North America and Latin America.
“We could not be prouder of this historical acquisition as we become a North American leader in flexible packaging,” said François Olivier, President and Chief Executive Officer of TC Transcontinental. “We started building our Packaging network only four years ago through a robust acquisition strategy to complement our well established printing and media operations and, today, the acquisition of Coveris Americas marks a major milestone in our continued journey to long-term profitable growth. Through the integration process, we will focus on combining our expertise, strengths and shared purpose, and on working as one to continue delivering value for Coveris Americas’ 3,500 loyal customers, many of whom are market leaders. Additionally, we are excited to welcome Coveris Americas’ talented and dedicated employees who will bring their trailblazing know-how to TC Transcontinental.”
Following this Acquisition, TC Transcontinental is now well positioned across a broad range of flexible packaging’s growing end markets, such as dairy, pet food, beverage, agriculture and consumer products. Additionally, the Acquisition expands TC Transcontinental’s product offering with best in-class capabilities and greater film manufacturing capabilities.
The US$1.32 billion (approximately C$1.72 billion1) purchase price in connection with the Acquisition was financed through a combination of:
Cash on hand;
Funds drawn from fully-committed new term debt and existing credit facilities; and
Net proceeds of approximately C$276 million from the Corporation’s previously closed bought deal public offering (the “Offering”) of 10,810,000 subscription receipts, inclusive of 1,410,000 subscription receipts issued pursuant to the exercise in full of the over-allotment option (the “Subscription Receipts”), through a syndicate of underwriters co-led by CIBC Capital Markets and Scotiabank.
As a result of the closing of the Acquisition and pursuant to the terms of the Subscription Receipts, each holder of a Subscription Receipt will receive, without any further action, one Class A Subordinate Voting Share of the Corporation (a ‘’Class A Share’’) for each Subscription Receipt held. TC Transcontinental expects that trading in the Subscription Receipts on the Toronto Stock Exchange (the “TSX”) will be halted shortly after the issuance of this press release and remain halted until the close of business today, at which time the Subscription Receipts will be delisted from the TSX. Trading of the underlying Class A Shares is expected to begin at the opening of the market on May 2, 2018.
This announcement is not an offer of securities for sale in the United States. The Class A Shares may not be offered or sold in the United States absent registration or an exemption from registration.
 Converted at CAD/USD exchange rate of 1:30: 1:00.
AVAILABILITY OF DOCUMENTS
Copies of related documents, such as the securities purchase agreement relating to the Acquisition and the short form prospectus, the underwriting agreement and the subscription receipt agreement relating to the Offering, are available on SEDAR (www.sedar.com) as part of the public filings of TC Transcontinental and on TC Transcontinental’s website at www.tc.tc.
ABOUT TC TRANSCONTINENTAL
TC Transcontinental is a leader in flexible packaging in North America, and Canada’s largest printer. The Corporation is also a Canadian leader in its specialty media segments. For over 40 years, TC Transcontinental’s mission has been to create products and services that allow businesses to attract, reach and retain their target customers.
Respect, teamwork, performance and innovation are strong values held by the Corporation and its employees. TC Transcontinental’s commitment to its stakeholders is to pursue its business activities in a responsible manner.
Transcontinental Inc. (TSX: TCL.A TCL.B), known as TC Transcontinental, has over 9,000 employees, the majority of which are based in Canada, the United States and Latin America. Following the transformational acquisition of Coveris Americas, TC Transcontinental’s consolidated pro forma revenues are estimated at C$3.3 billion for fiscal 2017. For more information, visit TC Transcontinental’s website at www.tc.tc.
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