MONTREAL -- Transcontinental expects to double its packaging division's revenues after agreeing to buy a company in Brooklyn, N.Y., that will expand the reach of its U.S. business.
The Montreal-based printer and publisher says it will pay US$80 million cash, plus additional funds if performance targets are met, to acquire Ultra Flex Packaging, which employs nearly 300 people.
Ultra Flex has about US$72 million in annual revenues, which will grow Transcontinental's packaging division to about US$150 million in annual revenue.
Transcontinental (TSX:TCL.A) has identified packaging as a growth opportunity that will partly offset declines in its core businesses related to a widespread shift to electronic publishing.
Chief executive Francois Olivier said the Utra Flex deal builds on last year's acquisition of Capri Packaging in Clinton, Mo., which makes plastic packaging for food products such as cheese and fresh pasta.
Ultra Flex specializes in packaging for dairy products such as cheese and yogurt.
"They package other items such as coffee and chocolate with their process (of) ... aluminum onto plastic," he said in an interview. "It's a new opportunity for us."
Olivier added that Ultra Flex has a national sales force across the United States, which was lacking with Capri.
He said Transcontinental hopes to quickly buy other food packaging companies if the price and other conditions are right.
Ultra Flex's three co-owners will remain with the company to support its growth.
Transcontinental is Canada's largest printer, with operations in print and digital media, publishing and flexible packaging and more than $2 billion of annual revenue.
