Transcontinental raises $287.5 mln for Coveris deal, CDPQ invests

Montréal-based printing company Transcontinental Inc (TSX: TCL.A/B) has closed a bought-deal subscription receipt offering, raising about $287.5 million. Investors in the offering included Caisse de dépôt et placement du Québec (CDPQ), the company said. Transcontinental plans to use the proceeds to help fund the acquisition of Coveris Americas, the U.S. packaging unit of Luxembourg’s Coveris Holdings SA. The deal, announced earlier this month, is valued at about $1.7 billion. Coveris Holdings is a portfolio company of U.S. private equity firm Sun Capital Partners.

PRESS RELEASE

Transcontinental Inc. Closes $287.5 Million Bought Deal Public Offering of Subscription Receipts

MONTREAL, April 20, 2018 (GLOBE NEWSWIRE) — Transcontinental Inc. (TSX:TCL.A) (TSX:TCL.B) (“TC Transcontinental” or the “Corporation”) is pleased to announce that it has completed today its previously announced bought-deal subscription receipt offering for aggregate gross proceeds of approximately $287.5 million.

The Corporation issued 10,810,000 subscription receipts (the “Subscription Receipts”) from treasury at a price of $26.60 per Subscription Receipt, on a bought-deal basis, for aggregate gross proceeds of approximately $287.5 million (the “Offering”), through a syndicate of underwriters (the “Underwriters”) co-led by CIBC Capital Markets and Scotiabank. The Offering includes the exercise by the Underwriters of the over-allotment option in full, resulting in the issuance of approximately $37.5 million of Subscription Receipts. Foyston, Gordon & Payne Inc. and Caisse de dépôt et placement du Québec are among the important investors having participated in the public offering.

TC Transcontinental will use the proceeds of the Offering, funds drawn on new credit facilities, funds drawn on existing credit facilities and cash-on-hand to fund the purchase price and related transaction costs payable in connection with the previously announced acquisition of the business of Coveris Americas, a business held by Coveris Holdings S.A., a portfolio company of Sun Capital Partners, Inc. (the “Acquisition”).

The gross proceeds from the Offering less one half of the Underwriters’ fee with respect to the Subscription Receipts will be held in escrow by a subscription receipt agent pending the completion of the Acquisition. If the Acquisition is completed on or before 5:00 p.m. (Eastern time) on September 29, 2018 (the “Outside Date”), the escrowed funds and the interest earned thereon (less applicable withholding taxes, any amounts required to satisfy any unpaid dividend equivalent payment and the remaining portion of the Underwriters’ fee to be paid net of applicable withholding taxes, if any) will be released to TC Transcontinental and each holder of a Subscription Receipt will receive, without any further action, one Class A Subordinate Voting Share of the Corporation (a “Class A Share”) for each Subscription Receipt held, plus an amount, if any, equal to the amount per Class A Share of any dividends of TC Transcontinental for which record dates have occurred during the period from the date of this press release up to but not including the closing date of the Acquisition.

If the closing of the Acquisition does not occur on or before the Outside Date, the securities purchase agreement entered into in connection with the Acquisition is terminated in accordance with its terms prior to such time for any reason, or TC Transcontinental delivers notice to the subscription receipt agent and the Underwriters or announces to the public that it no longer intends to complete the Acquisition, holders of Subscription Receipts will be entitled to receive an amount equal to the full subscription price of each Subscription Receipt held, together with their pro rata portion of the interest or other income, if any, earned on the escrowed funds and interest that would have been earned on the one half of the Underwriters’ fee paid to the Underwriters as if such fee had been held in escrow as part of the escrowed funds from, and including, the date of this press release to, but excluding, the date of termination per the above (“Deemed Interest”), less applicable withholding taxes. In that event, TC Transcontinental has agreed to pay the subscription receipt agent an amount equal to one half of the Underwriters’ fee (together with any Deemed Interest) with respect to the Subscription Receipts such that 100% of the gross proceeds of the Offering and any interest or other income earned on the escrowed funds (together with any Deemed Interest), less any applicable withholding taxes, would be returned to holders of Subscription Receipts.

The Subscription Receipts will commence trading today on the Toronto Stock Exchange (TSX) under the symbol TCL.R.

ADVISORS

Legal advice is being provided to TC Transcontinental by Stikeman Elliott LLP and, with respect to U.S. law, by Morgan, Lewis & Bockius LLP. Legal advice is being provided to the Underwriters by McCarthy Tétrault LLP. CIBC Capital Markets and Scotiabank are acting as Joint Bookrunners on the Offering.

AVAILABILITY OF DOCUMENTS

Copies of related documents, such as the final short form prospectus, the underwriting agreement, the securities purchase agreement and the subscription receipt agreement are or will be available on SEDAR (www.sedar.com) as part of the public filings of TC Transcontinental and on TC Transcontinental’s website at www.tc.tc.

ABOUT TC TRANSCONTINENTAL

TC Transcontinental is Canada’s largest printer and a key supplier of flexible packaging in North America. The Corporation is also a leader in its specialty media segments. TC Transcontinental’s mission is to create products and services that allow businesses to attract, reach and retain their target customers.

Respect, teamwork, performance and innovation are strong values held by TC Transcontinental and its employees. TC Transcontinental’s commitment to its stakeholders is to pursue its business activities in a responsible manner.

TC Transcontinental currently has over 6,100 employees in Canada and the United States, and had revenues of approximately $2.0 billion for the fiscal year ended October 29, 2017. For more information, visit TC Transcontinental’s website at www.tc.tc.

For information:

Media
Nathalie St-Jean
Senior Advisor, Corporate Communications
TC Transcontinental
Telephone: 514-954-3581
nathalie.st-jean@tc.tc
www.tc.tc

Financial Community
Shirley Chenny
Advisor, Investor Relations
TC Transcontinental
Telephone: 514-954-4166
shirley.chenny@tc.tc
www.tc.tc

Photo courtesy of Reuters/Christinne Muschi