Transcontinental Inc. (TSX : TCL.A TCL. B TCL.PR.D) announced today that it entered into a definitive agreement under which it agreed to acquire the assets of Capri Packaging, a supplier of printed flexible packaging, located in Clinton, Missouri, for a purchase price of US$133 million. The transaction is subject to regulatory approval in the United States. Capri Packaging is a division of Schreiber Foods, Inc., a US$5 billion employee-owned dairy company, located in Green Bay, Wisconsin.
TC Transcontinental will be acquiring two facilities in Clinton, Missouri, which employ close to 200 people, and generate approximately US$72 million in annual revenues. As part of the transaction, the seller, Schreiber Foods, Inc. has signed a 10-year agreement to secure Capri Packaging as a strategic supplier of printed flexible packaging, which represents about 75% of Capri's total revenues.
"This acquisition represents an important strategic move for the Corporation into a new promising growth area. It is part of our strategy to ensure our future growth path through diversification. Over the past year we evaluated various industries where we could leverage our manufacturing competency, a great success for us in the past. The printed flexible packaging industry was rapidly identified as a natural fit given that the production process is very similar to TC Transcontinental's printing operations and the market offers many opportunities for growth. We are very excited to partner with Schreiber Foods Inc. for the long term, which will provide us with a recurring revenue stream, and look forward to fostering our relationship over the coming years," said François Olivier, President and Chief Executive Officer of Transcontinental Inc.
"We are very pleased to enter into a long-term supply agreement with TC Transcontinental. They are an exceptional company that brings world-class printing capabilities, dynamic leadership and decades of experience to the table. And most importantly, TC Transcontinental shares many of the same values and qualities that are core to Schreiber. We look forward to working closely with TC Transcontinental in the months ahead to ensure a smooth transition, while setting the foundation for a long-lasting friendship and partnership," said Mike Haddad, President and Chief Executive Officer of Schreiber Foods, Inc