November 28, 2019 By PrintAction Staff
TC Transcontinental has announced it is selling its paper and woven polypropylene packaging operations to Hood Packaging for US$180 million (about C$239 million).
Hood Packaging is a North American manufacturer of plastic film and bags, woven polypropylene bags, coated and laminated materials, and paper packaging, with head offices in Burlington, Ont., and Madison, Miss. It employs almost 2,000 employees and is a wholly owned subsidiary of Hood Companies, Inc.
The corporation anticipates using the net proceeds from this transaction to reduce debt in line with its goal to bring its net indebtedness ratio below 2.0x, as well as to continue its transformation through targeted acquisitions. The transaction is subject to regulatory approvals and is expected to close in the first quarter of fiscal 2020.
“When we acquired Coveris Americas, we welcomed all of their assets and broad portfolio of products,” said François Olivier, President and CEO of TC Transcontinental. “After operating the paper business for almost 18 months, we concluded that it is less core to our Packaging Sector’s growth strategy. As such, our decision to sell these assets is aligned with our plan to continue building our flexible packaging platform where we see good growth potential. The transaction will enable the company to deleverage our balance sheet faster than expected and give us the flexibility to continue acquiring businesses that are more complementary to our existing flexible packaging portfolio.”
Hood Packaging will acquire the following paper packaging operations and buildings of TC Transcontinental: Transcontinental Sibley, Iowa; Transcontinental Hanford, California; Transcontinental Hazleton, Pennsylvania; and Transcontinental Tifton, Georgia. In addition, Hood Packaging is acquiring the paper and woven polypropylene packaging operations at the Transcontinental Spartanburg, South Carolina plant; TC Transcontinental will retain ownership of this building and continue operating from this location, which also manufactures plastic flexible packaging.
About 415 employees will transfer to Hood Packaging after the closing of the transaction.
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