Topic: How To Invest

The Successful Investor Hotline – Friday, April 6, 2018

Article Excerpt

TRANSCONTINENTAL INC., $26.63, Toronto symbol TCL.A, is Canada’s leading printer of advertising flyers, magazines, books and newspapers. That includes weekly newspapers in Quebec and Atlantic Canada. In the past few years, the company has cut its exposure to cyclical advertising with the acquisition of companies that make plastic packaging for food and other products. This week, Transcontinental announced the biggest takeover in its 42-year history. The company has agreed to buy Chicago-based Coveris Americas. That privately held firm makes plastic packaging for consumer and industrial products at 21 plants in the U.S., Canada, the U.K., Ecuador, Guatemala, Mexico, New Zealand and China. Transcontinental will pay $1.32 billion U.S. (or $1.72 billion Canadian) when it completes the purchase in mid-2018. The amount is equal to 84% of its $2.05 billion market cap (the total value of all outstanding shares). With the Coveris purchase, Transcontinental will now get 48% of its revenue from packaging. That’s up from 15% in the latest quarter. The new operations will also increase…