Transcontinental buys Flexstar as it builds flexible packaging business

Transcontinental Inc. has added film extrusion as part of its thrust into plastic flexible packaging.

The Montreal company said Oct. 17 that it bought all the shares of Flexstar Packaging Inc. of Richmond, British Columbia. Transcontinental paid about C$44 million (US$33.4 million) for Flexstar, which had sales of about C$36 million (US$27.4 million) for the 12 months ending in July. Flexstar's earnings before interest, taxes, depreciation and amortization were about C$6 million (US$4.56 million).

Flexstar extrudes polyethylene film and specializes in barrier films. It prints, laminates and makes pouches for cereal, confectioneries, snacks, frozen food and coffee.

Transcontinental senior vice president of finance Donald Lecavalier said in a phone interview that his company might integrate Flexstar's film production with other flexible packaging businesses it has acquired.

“We need to take a look at maximizing the synergies,” explained Lecavalier.

The deal gives the Montreal printing and media conglomerate its first plant in Canada and on the west coast.

Lecavalier said Transcontinental intends to grow its packaging business.

“We will be in acquisition mode for the next few years.”

The recent deal was made only three months after Transcontinental bought Robbie Manufacturing Inc. of Lenexa, Kan. Since 2014, the company has bought Ultra Flex Packaging Corp. of New York and Capri Packaging of Clinton, Mo. The purchased companies had annual sales of about US$221 million at the time Transcontinental finalized the deals.

Transcontinental had sales of about C$2 billion (US$1.52 billion) in 2015. It recently sold small publishing and printing operations as part of its diversification strategy.

“Flexstar enables us to extend our footprint to the West Coast, providing us a coast-to-coast platform to better optimize our production,” noted Transcontinental President and CEO Francois Olivier in a news release.

Flexstar was owned by investors led by Stern Partners Inc. of Vancouver. One of the investors is President and CEO Marc Bray, who will stay with the business.

“We believe our core values align very well with [Transcontinental] and are pleased to be a part of its North American packaging platform,” Bray stated in a news release.