AEP Industries, the "Company" or "AEP") today announced that the Company, along with its Canadian subsidiary, AEP Canada Inc., has entered into an agreement with Transco Plastics Industries Ltd. ("Transco"), a Quebec company, to purchase the machinery and equipment and related assets necessary to manufacture the performance films, specialty bags and industrial films of Transco.
The transaction, which is expected to close within the next two weeks, has a purchase price of approximately $5.3 million, excluding a one-year commission and transition service costs, and is expected to gain approximately $30 million in annual net sales from Transco's former customers. AEP noted that it intends to relocate the manufacturing activities associated with the Transco businesses to its strategically located manufacturing sites throughout North America.
"This is a compelling investment opportunity for AEP that will gain meaningful business to our company and deliver a solid return on invested capital," said Brendan Barba, Chairman, President and Chief Executive Officer of the Company. "With Transco we will expand our already robust presence in the plastic packaging industry and enhance our suite of products. We are pleased to capitalize on the opportunity to acquire the Transco assets and create additional value for our shareholders."
AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the consumer, industrial and agricultural markets. The Company has manufacturing operations in the United States and Canada.