Transcontinental Inc. (53L.F) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Transcontinental's Special Meeting of Shareholders. [Foreign Language] Our meeting will be bilingual with simultaneous translation. [Foreign Language] At the bottom of your screen you can choose the language so you can hear the French assembly in it's original language or the translation. So you need to be connected to the Internet to fully participate. Only the duly registered shareholders or proxies can participate and vote. So the message tab allows you to vote. We invite you to refer to the 3 tabs to the left of this screen. First of all, the welcome tab shows all of the information regarding this assembly, including how to ask questions and vote. The message tab allows you to ask questions through the message box. You can also ask questions in the language of your choice. And we will answer to your questions at the end of the assembly. Under document tab, you will find the documents relating to the extraordinary general meeting or special general meeting. When voting is open, you will have access to another vote tab, which will allow you to view the resolution being presented and to vote, and then we will be able to vote. And before we start, we would like to attract your attention to the warn message regarding forward-looking statements that appear on the screen, regarding today's assembly representatives of the company may in their remarks and answers to the questions to make forward-looking statements and the documents accompanying their remarks may also contain forward-looking information. Certain statements other than statements of historical fact are forward-looking statements, and are based on certain assumptions, both general and specific. We advise you not to place undue reliance on these forward-looking statements and wish to emphasize that there is a risk that actual events, sorry, or results could differ materially from the expectations expressed or implied in these forward-looking statements. Now I'd like to give the floor to Mr. Isabelle Marcoux.

Ladies and gentlemen, welcome. I have the pleasure of welcoming you to the Special General Meeting of Shareholders of Transcontinental Inc. So I am with Thomas Morin, President and Chief Executive Officer; Sam Bendavid, Chief Development and Procurement Officer; and the company's -- and Christine Desaulniers, sorry, Chief Legal Officer and Corporate Secretary of the company. I will act as Chair of the assembly and Christine will be Secretary of the assembly.

Now first of all, I would like to ask to the representatives of TSX Trust Company to act as scrutineers for the meeting. Ms. Francine Beauséjour and Ms. Isabelle Vachon have provided me with a report indicating that we have reached the quorum, I therefore, declare that the meeting is duly convened and constituted. The report of scrutineers and other documents leading to this assembly will be filed in the assembly's records. Only registered shareholders and duly appointed proxies may vote at this meeting. If you have already voted, you have nothing to do. Votes are already included. Taking into account, however, any registered shareholder or duly appointed proxy who has not yet voted or who wishes to change their vote may vote directly on the webcasting platform. The vote is now accessible for the special resolution and may be conducted through the formal part of this meeting. You may therefore vote immediately or when the resolution is presented. Voting will close following the proposal of the resolution, we will then inform you that we are closing the vote in 1 minute. You should see the voting tab on the webcasting platform, which will show the Assembly's proposal. I will now give the floor to Isabelle Marcoux.

So last December 7, the company entered into a shareholder purchase agreement with ProAmpac Holdings Inc. and Transcontinental Printing Inc. under the terms of which the purchaser and member of its group agreed to purchase our packaging business. The total consideration payable is USD 1.51 billion or approximately CAD 2.1 billion. This amount is payable in cash, that's the estimated transaction costs. It remains subject to customary adjustments, including those related to debt and debt-like items, cash flow and net working capital as well as the cost of the operation. The share purchase agreement conducted between ProAmpac company and Transcontinental and primary Transcontinental Printing Inc. set out the terms and conditions of the transaction is the result of a comprehensive negotiation process conducted independently under the supervision and with the participation of the Board of Directors and with the support of external financial and legal advisers. The terms of the operation are described in the proxy solicitation circular prepared in anticipation of this meeting and are deemed reasonable by the Board of Directors. The management and the Board of Directors of the company continuously evaluate the company's activities, financial performance and opportunities to create value for the shareholders. In January 2025, after discussing various strategic opportunities, the Board of Directors mandated management to retain the services of financial advisers and other experts who were consulted to analyze the strategic and operational options related to our packaging sector. The process lasted several months and involved several players on the market. Please refer to the proxy solicitation circular, which entails the negotiations that led to the signing of the share purchase agreement on December 7, 2025, between the company ProAmpac Company and Transcontinental Printing Inc. So the Board of Directors consider several factors before approving the conclusion of the agreement, including the attractive price and the increasing difficulty of making progress -- to progress our packaging sector through acquisitions due to prevailing conditions in the global packaging industry, limited volume growth in this sector for several years and recognition of the value of our packaging sector at approximately 9x EBITDA, which is consistent with several recent transactions in the industry through this transaction will allow the company shareholders to receive a cash distribution of approximately $20 per share. Furthermore, the company's controlling shareholder Capinabel Inc. which holds 65.96% of the voting rights has entered into a support agreement with ProAmpac under which it is committed to voting in favor of the resolution relating to this exercise separation. The Board of Directors also received 2 opinions from financial advisers confirming that the consideration of the company we will receive from the transaction, sorry, what we received -- will be fair from a financial perspective. After careful consideration in the light of these opinions, the Board of Directors concluding that the transaction is in the best interest of the company. Consequently, the Board recommends the shareholders to vote in favor of the resolution resulting to this exercise or operation. Today, you will therefore have to vote on a special resolution approving this transaction in accordance with the Canada Business Corporation Act. The resolution relating to the transaction must be approved by at least 2/3 of the votes cast at the meeting by the holders of Class A shares and holders of Class B shares present virtually or represented by proxy at the meeting, voting together as if their shares formed a single category, single-class. Christine, may I have a proposed resolution to this?

Yes, to facilitate the smooth running of this meeting, we have asked in advance of shareholders of the company to propose and support the proposed resolution regulating to the operation. Ms. Chair, we have received a proposal from Sam Bendavid assisted by Yan Lapointe, both Transcontinental shareholders to present a special resolution, and this is in the Appendix A of the management proxy circular prepared for the extraordinary general meeting of shareholders of the company meeting held on February 2, 2021. This resolution aims to approve the sale of all issued an outstanding shares of the share capital of each of the entities that carry on the activities of the company's packaging sector as provided for in the share purchase agreement dated December 7, 2025 between company ProAmpac Holdings and Primary Transcontinental Inc. Thank you. The proposal has been fully made and seconded. We invite you to vote. Voting will close in 1 minute. Please vote, submit your vote now. You have 1 minute. [ Voting ]

The proposal has been duly made and seconded. So the scrutineers confirm that at least 2/3 of the votes are in favor of the resolution relating to the operation, I therefore, declare, the resolution approved. Report on the final voting results will be available on SEDAR+. Now that we have addressed the item on the agenda. I propose that we close the formal part of the meeting. We have reached the Q&A session. This is for shareholders. Christine, do we have any questions?

Yes, we have not received any question yet.

Well, I would like to congratulate members of the team so that we are now at where we are at and also the directors of the Board. So we are able to tell you that this transaction is possible, and we have the amount in our bank account. Thank you so much for your trust and your participation, and we will meet you again at the Annual Assembly in the month of March. Thank you so much for your participation. Thank you, and goodbye. Have a great day.