TC Transcontinental Sells Industrial Packaging Division
TC Transcontinental Makes Strategic Move in Packaging Sector
TC Transcontinental has announced an important step in its growth strategy by selling its industrial packaging operations to Hood Packaging Corporation. This significant transaction is valued at US$95 million, which translates to approximately C$132 million, subject to adjustments related to working capital. During the recent twelve months, the industrial packaging operations generated about US$50 million in revenues. With this sale, TC Transcontinental is set to focus its resources more effectively and decrease its net debt.
Details of the Transaction
The company’s decision to divest from the industrial packaging sector stems from a strategic assessment of its business alignments. Thomas Morin, President and CEO of TC Transcontinental, emphasized that while the industrial packaging business is robust, it did not provide the necessary synergies with the company’s broader operations. Hood Packaging is seen as a compatible buyer, given their focus on similar market segments.
Operational Transition and Workforce Impact
As part of the agreement, Hood Packaging will acquire the packaging operations located in Thomasville, North Carolina, which includes the associated production facility. This transition will also affect 138 TC Transcontinental employees who will be integrated into Hood Packaging. The acquisition additionally covers the industrial packaging operations of the Ontario, California plant, contributing approximately 15% to its overall revenue structure.
Looking Ahead: Financial and Strategic Implications
The proceeds from this sale are expected to enhance TC Transcontinental's flexibility for future investments, particularly in growth areas. This shift will allow the corporation to allocate resources more effectively, potentially paving the way for new acquisitions that align better with its core growth strategy.
About TC Transcontinental
Established in 1976, TC Transcontinental has become a leader in flexible packaging in North America and is recognized as the largest printer in Canada. The company serves various sectors with dedication to quality, innovation, and sustainability. With a workforce of approximately 7,600 people, most of whom are based in key markets including Canada, the U.S., and Latin America, TC Transcontinental reported revenues of $2.9 billion for its fiscal year ending October 29, 2023. The company values strong principles such as teamwork and performance, ensuring a responsible approach to all business activities.
Corporate Governance and Stakeholder Commitment
TC Transcontinental’s management is dedicated to upholding its core values while fostering a culture of respect and innovation among its employees. Both current and future initiatives underscore a commitment to stakeholders that promises reliability and integrity in all business dealings.
Frequently Asked Questions
What operations have TC Transcontinental sold?
TC Transcontinental has sold its industrial packaging operations to Hood Packaging Corporation.
What is the value of the sale?
The sale is valued at US$95 million, approximately C$132 million, subject to working capital adjustments.
How will this sale affect TC Transcontinental's business strategy?
The sale will allow TC Transcontinental to reduce net debt and focus on core growth areas and potential acquisitions.
Where are the packaging operations located?
The sold operations include facilities in Thomasville, North Carolina, and Ontario, California.
What is TC Transcontinental's market position?
TC Transcontinental is a leading company in flexible packaging in North America and the largest printer in Canada.
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