Issue 17 – Transcontinental is Transforming

In the past, Transcontinental Inc. (TSX: TCL/A) was known as Canada’s largest printing company. For many years, the company faced falling demand for printed products. We all know that the physical newspaper business is declining and will probably disappear in the coming years. TCL/A has navigated this decline as efficiently as possible. For example, printing revenue has been falling for the last decade, but the company was able to keep its margins stable, and its EBITDA has also declined less than its revenue on a percentage basis. This was achieved by having a disciplined management team, that acted by closing inefficient printing presses, and selling non-core media assets.  Its discipline allowed the company to shore up its balance sheet and make a few small acquisitions in packaging. However, none of them where large enough to transform the company until they announced the US$1.32 billion Coveris Americas acquisition on April 02, 2017.

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