A new entrant is poised to join the flexible packaging market to offset its declines in media and printing.
TC Transcontinental Inc. of Montreal has agreed to pay US$133 million for Capri Packaging and its two facilities in Clinton, Mo. Capri employs about 200 and has annual sales of about US$72 million.
Capri's parent company is Schreiber Foods Inc., a US$5 billion, employee-owned dairy company in Green Bay, Wis. Schreiber has a 10-year agreement for Capri to continue as a strategic packaging supplier. The supply deal represents about 75 percent of Capri's revenues.
“This acquisition represents an important strategic move for the corporation into a new, promising growth area,” explained Transcontinental President and CEO Francois Olivier in a March 11 news release. “It is part of our strategy to ensure our future growth path through diversification.”
Flexible packaging production is a natural fit for Transcontinental because it is similar to Transcontinental's existing printing operations, Olivier indicated.
Transcontinental reported in an earnings statement that weakness in advertising hit its core printing and media activities, slicing first quarter sales by 5 percent to C$499.3 (US$449.4 million) compared to a year earlier. Transcontinental runs print and digital media and claims to be the largest printer and a leading media and marketing player in Canada.
Schreiber says it is the largest employee-owned dairy company in the world. It runs more than 30 facilities around the world.
Transcontinental plans to keep Capri's two plants open because it has no similar technology elsewhere in the company, a spokeswoman said.
The Montreal company expects to complete the deal in April. Capri buys plastics films, prints then and finishes them.