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A Transcontinental facility is seen in this file photo.Transcontinental/Transcontinental

Transcontinental Inc. is aggressively pushing away from its print-media roots, acquiring a Chicago-based plastics-packaging manufacturer for $1.7-billion in a move announced on Monday that would make it one of the biggest packaging companies of its kind on the continent.

The company bills itself as Canada’s largest printer, but has made no secret of its desire to expand into packaging as print media, especially news media, becomes less lucrative. Chief executive officer François Olivier called the acquisition a “major milestone” toward “profitable growth as a diversified print, packaging and media company” on a conference call on Monday.

The acquisition adds to Transcontinental’s seven existing packaging facilities, and comes after numerous hints, including in its most recent annual report, that the company wanted to boost its market share in the sector through acquisitions. At the same time, it is in the midst of selling off its regional newspaper holdings. Just a year ago, for example, it sold all of its Atlantic Canadian newspapers, news websites and printing plants to Halifax Chronicle Herald owner SaltWire Network Inc., dramatically concentrating newspaper ownership in the region.

The agreement to buy Coveris Americas for US$1.32-billion from Coveris Holdings SA announced on Monday would hand Transcontinental 21 production facilities across the globe that manufacture “flexible” packaging materials such as thin rolled plastic products often used to package food, as well as bags and pouches, and a variety of films and labels. Coveris Americas brought in nearly US$1-billion in revenues in its last fiscal year, the companies said.

Investors cheered the announcement, pushing Transcontinental shares up almost 10 per cent to $27.92 on an otherwise rocky day for public markets. The company said that following the acquisition, it would be among the top-10 biggest flexible-packaging companies of its kind in North America, and analysts highlighted the transaction as a chance for it to become an industry leader.

“It makes [Transcontinental] a major player in flexible packaging in North America, opening up a number of expansion opportunities across new customers and product categories, in addition to offering cost rationalization and margin expansion,” wrote Aravinda Galappatthige, an analyst with Canaccord Genuity, in a research note Monday.

Drew McReynolds, an analyst with RBC Dominion Securities, wrote: “We believe this transaction is entirely consistent with the company’s transformation from printing to packaging.”

Transcontinental did not make executives available for interviews Monday, but Mr. Olivier said on the conference call that the acquisition would make packaging the largest division of Transcontinental in terms of pro-forma 2017 revenues, marking a major step in a transformation the company began four years ago.

“This strategic acquisition will bring additional scale; enhanced capabilities and market diversification; attractive and well-invested assets; and growth opportunities,” he said on the call. The acquisition of Coveris Americas from Coveris Holdings would strengthen Transcontinental’s position in packaging for products such as dairy and pet food, he said.

Coveris Holdings is a portfolio company of Sun Capital Partners Inc., a private-equity firm based in Boca Raton, Fla.

Between 2014 and 2017, Transcontinental made five acquisitions in the flexible packaging sector, including Montreal’s Les Industries Flexipak Inc., and it brought in $308-million across the division in the 2017 fiscal year. Last month, Transcontinental also announced it would buy the smaller Illinois-based Multifilm Packaging Corp., which specializes in high-end candy and chocolate packaging.