Transcontinental has entered into an agreement to buy US-based flexible packaging supplier Ultra Flex Packaging in a deal worth $80m.
The amount requires to be paid in cash at closing, along with an additional consideration payable subject to attaining pre-established financial targets. The transaction, contingent upon regulatory nods in the US, is expected to close before the end of the current fiscal year.
Transcontinental, also known as TC Transcontinental, has a staff headcount of over 8,000 in Canada and the US.
TC Transcontinental president and CEO Franois Olivier said: "This acquisition builds on our Capri Packaging acquisition last year and is part of our strategy to ensure our future growth path through diversification.
"This latest acquisition expands our footprint in the US, gives us access to a national sales force, to new vertical markets and manufacturing capabilities. Once the acquisition has been completed, we will report annualized revenues of over US$150 million in our packaging division. The three co-owners of Ultra Flex Packaging have agreed to stay on to ensure a smooth transition, provide continuity and support future growth."
Ultra Flex Packaging provides employment to 300 people. The company had posted $72m in annual revenues and $12m in operating income before amortization during the past fiscal.
Ultra Flex Packaging founder and CEO Eli Blatt said: "We are very pleased to join TC Transcontinental... While we bring to the table industry knowledge, a highly skilled workforce and a national sales team, TC Transcontinental brings strong leadership, financial means and decades of manufacturing experience. Together we have what it takes to build the foundation for future growth."
