Transcontinental said on Monday it would sell its packaging unit to ProAmpac Holdings in a C$2.22 billion ($1.61 billion) deal, including debt, sending the Canadian firm’s shares up 28%.
The sale comes at a time when the packaging industry is grappling with high freight rates and slowing demand as a result of trade uncertainties due to tariffs.
“Organic growth is expensive, and it was also hard to create value to the extent that there is modest volume growth in packaging,” Transcontinental executives said in a conference call.
Montreal-based Transcontinental, which operates in flexible packaging and provides retail marketing services, said it would distribute C$20 per share in cash to its shareholders following the sale.
The deal, which is expected to close in the first quarter of calendar year 2026, is subject to shareholder and regulatory approvals and other customary conditions, Transcontinental said.
ProAmpac chief executive Greg Tucker said the acquisition would broaden its end-market focus to include protein, dairy, and medical segments and expand its geographic presence.
CIBC Capital Markets and RBC Capital Markets served as financial advisors to TC Transcontinental, while Stikeman Elliott LLP and Morgan Lewis & Bockius LLP served as legal counsel.
Last year, Transcontinental sold its industrial packaging operations to Hood Packaging Corporation for $95 million.
Source: Reuters.com