Chicago — TC Transcontinental's interest in flexible plastic packaging is only growing, according to the company's top financial official.
The Montreal-based company, officially known as Transcontinental Inc., is looking to build on its $1.3-billion purchase of Coveris earlier this year, Chief Financial Officer Donald LeCavalier said during a recent interview at Pack Expo in Chicago.
But the deals to come, at least for now, probably won't be as large, as Transcontinental works to pay down debt from the Coveris transaction.
“We think we can be a consolidator. There are areas where we have a very solid position. There's areas where we can improve our position. And who knows? Maybe we can just follow our clients” into new markets, LeCavalier said.
“We want to grow this business,” he said, but the company will take a measured approach. “We'd rather be a little bit slower than others, but make sure we do the right transaction.”
TC Transcontinental has a longer history in paper printing and media holdings, and entered the flexible packaging market in recent years. Prior to the Coveris deal, the company had virtually no debt.
As the company moves more into flexible plastics packaging, where there is room for growth, “our appetite for leverage will be higher,” LeCavalier said.
The company wants to be careful about its debt levels considering its business mix between packaging and printing. “Since a large part of our business still comes from the printing of paper, we want to make sure we have the right leverage.”
TC Transcontinental is the largest printer in Canada and among the largest in North America, the company said.
Buying Coveris increased the company's number of flexible packaging facilities from seven to 28. That compares to just two facilities in 2014 and five in 2016.
“We were a small player” prior to the Coveris deal, LeCavalier said. “I'm not saying we are a big player now,” he added, but the company is “more in the major league.”
The Coveris deal vaulted the company from No. 22 to No. 7 among the largest flexible packaging converters in North America, the company said at the time the transaction was announced, with combined sales of about $1.2 billion in that segment.
TC Transcontinental previously purchased Robbie Manufacturing Inc. of Lenexa, Kan., and Flexstar Packaging Inc. of Richmond, British Columbia, both in 2016, Ultra Flex Packaging Corp. of New York in 2015, and Capri Packaging of Clinton, Mo., in 2014.
Products include bags, pouches, lidding, roll stock and shrink films. Markets include food, beverage, agriculture, consumer products, industrial, supermarket and tobacco.
TC Transcontinental is publicly traded on the Toronto Stock Exchange, but is under the control of the Marcoux family.
The company wants to have controlled growth and is in the position to make a tuck-in acquisition if the right opportunity presents itself, LeCavalier said.
“We are going to grow. This is our growth platform,” he said.