Transcontinental Inc. enters into Agreement to Sell its Packaging Business

Core Points - TC Transcontinental has entered into a stock purchase agreement with ProAmpac Holdings for the sale of its Packaging Sector, implying an enterprise value of approximately $2.22 billion [1][2][8] - The transaction is expected to provide a cash distribution of approximately $20.00 per share to shareholders [2][14] - The deal is subject to shareholder and regulatory approvals, with a special meeting planned for early 2026 [3][10] Financial Details - The aggregate purchase price is approximately $2.10 billion, subject to adjustments for debt and working capital [2][8] - The acquisition multiple is approximately 8.7x the Packaging Sector's last twelve months adjusted operating earnings before depreciation and amortization [8][21] - For the twelve months ended July 27, 2025, the Packaging Sector generated revenues of approximately $1.6 billion and adjusted operating earnings before depreciation and amortization of approximately $255 million [20][21] Strategic Implications - The transaction is viewed as a means to maximize shareholder value and allows TC Transcontinental to focus on its Retail Services & Printing and Educational Publishing businesses [4][6] - ProAmpac aims to broaden its market focus and geographic presence through this acquisition, enhancing its capabilities in the protein, dairy, and medical segments [6][8] - The deal reflects a period of industry consolidation and positions TC Transcontinental for future growth [5][6] Board and Shareholder Actions - The Board of Directors unanimously recommends that shareholders vote in favor of the transaction [11] - Capinabel Inc., the largest shareholder, has agreed to vote in favor of the transaction, holding approximately 65.96% of the voting shares [11] - Fairness opinions from CIBC Capital Markets and RBC Capital Markets indicate that the transaction is fair from a financial perspective [12] Future Outlook - Post-transaction, the company expects a pro forma net indebtedness ratio of approximately 1.7x, indicating improved financial flexibility [15] - The management will provide updated financial outlooks following the transaction's completion [22]