TC Transcontinental (TSX: TCL.A, TCL.B), a prominent player in flexible packaging and North America’s largest printer, has sold its industrial packaging operations to Hood Packaging Corporation for approximately $95 million USD (about $132 million CAD).
This strategic sale aligns with TC Transcontinental’s focus on its core sectors, reinforcing its dedication to sustainable growth through flexible packaging and publishing. The transaction, however, remains subject to adjustments related to working capital.
The industrial packaging operations sold to Hood generated around $50 million USD (approximately $68 million CAD) over the twelve months ending in July 2024. According to TC Transcontinental, these proceeds will be directed toward reducing its net debt and enhancing flexibility in capital allocation, including targeted acquisitions within high-growth segments.
In a statement, TC Transcontinental CEO Thomas Morin explained the reasoning behind the sale: “Industrial packaging is a solid business. However, after operating it for several years, we concluded that it offers few synergies with the rest of our portfolio and is not core to our Packaging Sector’s growth strategy.” The transfer of these assets to Hood Packaging, a family-controlled company for which industrial packaging is central, marks a strategic fit for both parties and provides a favorable outcome for employees.
The deal includes TC Transcontinental’s industrial packaging operations in Thomasville, North Carolina, where 138 employees will be transitioned to Hood Packaging. Additionally, Hood will acquire the industrial packaging segment of TC Transcontinental’s Ontario, California plant, representing roughly 15% of the facility’s revenue. Roop Nangia, Senior Vice President of Consumer & Beverage at TC Transcontinental, extended his gratitude to the employees for their dedication and contribution.
This sale underscores TC Transcontinental’s commitment to reinforcing its core business lines, particularly in flexible packaging, where the corporation has prioritized sustainable growth. The company has progressively shifted its portfolio toward packaging solutions, educational publishing, and printing services, aligning with a strategy to streamline operations and concentrate on sectors with high synergy and growth potential.
The acquisition by Hood Packaging also reflects a strong alignment of interests. As a family-operated firm with a dedicated focus on industrial packaging, Hood is well-positioned to leverage TC Transcontinental’s former assets to expand its reach and reinforce its market position.