Transcontinental Inc., Canada, entered into a definitive agreement to acquire Coveris Americas, a Chicago-based business held by Coveris Holdings S.A., a portfolio company of Sun Capital Partners, Inc., Boca Raton, Fla., for $1.32 billion.
Coveris Americas manufactures a variety of flexible plastic and paper products, including rollstock, bags and pouches, co-extruded films, shrink films, coated substrates and labels out of 21 production facilities worldwide, namely in the United States, UK and Australasia.
"Today’s announcement marks a turning point in TC Transcontinental’s 42-year history. This transaction crystallizes our strategic shift toward flexible packaging and solidifies our commitment to profitable growth," says Isabelle Marcoux, chair of the board of Transcontinental. "We are convinced that this transformational acquisition will be a driver in the creation of long-term value for all of our stakeholders. It is with pride that we begin the next chapter of our successful journey with Coveris Americas, its employees and customers, building on our values of respect, teamwork, performance and innovation."
"We are thrilled to announce such a game-changing transaction for TC Transcontinental and to bring our vision of becoming a North American leader in flexible packaging to life," says François Olivier, president and CEO of TC Transcontinental. "The acquisition of Coveris Americas adds significant depth and scale to our existing platform, with flexible packaging operations now expected to be our largest division in terms of TC Transcontinental's pro forma revenues based on its fiscal year 2017. This transaction complements and bolsters our existing product offering in several flexible packaging end markets, including dairy, pet food and consumer products. Additionally, it allows us to enter new and attractive flexible packaging end markets such as agriculture, beverage and protein. We are looking forward to building on our combined strengths and to continue working with Coveris Americas’ loyal customers, many of whom are market leaders. We are also eager to welcome Coveris Americas’ talented employees who will bring their leading-edge expertise to TC Transcontinental."
"Today marks an exciting milestone for Coveris Americas, as we join TC Transcontinental, a company that shares our passion for growth through innovation, service and quality," adds Craig Reese, chief executive officer of Coveris Americas.
"We are extremely proud of our partnership with the management team to grow and improve Coveris Americas, and we are confident that TC Transcontinental is the right home for the business to continue its industry leadership," says Marc Leder, co-chief executive officer of Sun Capital Partners.
Complementing its solid printing and media operations, this acquisition significantly diversifies TC Transcontinental’s business into flexible packaging, including other benefits such as:
• The acquisition positions TC Transcontinental among the Top 10 flexible packaging converters in North America. Creates a leading flexible packaging supplier in North America, based on Coveris Americas’ financial results for its fiscal year ended Dec. 31, 2017 and on TC Transcontinental's financial results for its fiscal year ended Oct. 29, 2017.
• The acquisition provides TC Transcontinental with a strong position across a broad range of flexible packaging's growing end markets. Strong pro forma position in dairy, pet food, beverage, agriculture and consumer products.
• The acquisition expands TC Transcontinental's product offering with best-in-class capabilities and greater film manufacturing capabilities. Complementary manufacturing capabilities in printing, lamination, converting and extrusion, with significant expertise in high-end blown extrusion as well as cast extrusion, expansion of product offering with barrier films, thermoformed films, shrink bags, cast nylon, multi-wall bags, banana tree bags, mulch films and coatings, among others and the capability to insource a portion of film production.
• The acquisition enhances TC Transcontinental's relationships with large, market-leading customers. Coveris Americas brings a broad portfolio of approximately 3,500 customers, including long-standing relationships with many key accounts.
• The acquisition provides an integrated flexible packaging platform leading to potential economies of scale. Adds an extensive footprint of 21 well-invested production facilities in the United States, Canada, Ecuador, Guatemala, Mexico, the United Kingdom, New Zealand and China to TC Transcontinental's 7 existing flexible packaging facilities. And, it increases business scale, thereby strengthening TC Transcontinental’s competitive position.