October 22, 2012
SOUTH HACKENSACK, N.J (Oct. 22, 12:50 p.m. ET) — AEP Industries will purchase the assets of flexible packaging manufacturer Transco Plastics Industries Ltd. for about $5.3 million.
AEP and its Canadian subsidiary, AEP Canada Inc., will acquire Transco’s machinery, equipment and related assets. The company will gain about $30 million in annual net sales from Transco’s former customers, according to a news release from AEP.
The deal is expected to close in the next two weeks.
Transco operates one plant at its headquarters in Montreal and has about 150 employees. AEP plans to relocate manufacturing from Transco to AEP facilities throughout the North America, according to the release.
AEP has 11 plants in the United States and one in West Hill, Ontario.
“This is a compelling investment opportunity for AEP that will gain meaningful business to our company and deliver a solid return on invested capital,” said Brendan Barba, chairman, president and CEO of AEP, in the release. “With Transco we will expand our already robust presence in the plastic packaging industry and enhance our suite of products.”
Transco makes retail and industrial packaging, shrink films, bags and mailers, and offers extrusion, conversion and printing operations at its plant. The firm reported sales of approximately $74 million in 2011, including $56 million in film and sheet sales, according to Plastics News’ survey of the film and sheet industry.
The acquisition is AEP’s second in about a year. In October 2011 the company announced its acquisition of Webster Industries, a manufacturer of private-label food and trash bags, for a purchase price of about $26.7 million, according to filings with the Securities and Exchange Commission.
AEP, based in South Hackensack, N.J., makes a variety of packaging films for consumer, industrial and agricultural markets. The publicly traded company reported sales of $291.9 million in the third quarter of 2012, up from $246 million for the year-ago period.
AEP is North America’s seventh largest film and sheet manufacturer with estimated sales of $1.2 billion in 2011, according to Plastics News’ rankings.