CANADA – North American manufacturer and marketer of envelopes and a growing provider of paper-based packaging solutions, Supremex has acquired the assets of Canada-based folding carton packaging solution retailer Graf-Pak.
The transaction was concluded for a total consideration of approximately C$6.0 million (US$4.48m), on a cash-free and debt-free basis.
Financed via Supremex’s existing credit facility, the deal is now subject to certain customary adjustments.
Founded in 1995 and employing close to 25 people, Graf-Pak operates a facility located in Pointe-Claire, Québec, near the Company’s primary folding carton plant in Lachine.
Its offering is comprised primarily of the printing and manufacturing of folding carton packaging products, mainly for the food and cosmetics markets.
Stewart Emerson, President and CEO of Supremex said: “The acquisition of Graf-Pak is a perfect fit with our existing folding carton operations in Quebec.
“Graf-Pak’s well-established business in the food and cosmetics sectors will provide further critical mass in these two important growth vectors for Supremex.
“Its state-of-the-art equipment ensures speed, efficiency, accuracy and superior quality at every step of the manufacturing process.
“Given its proximity, we intend to integrate Graf-Pak’s operations into our Lachine hub over the next 90 days and we expect this tuck-in operation to rapidly yield synergies within our folding carton group.”
In January this year, Supremex acquired the shares of Impression Paragraph Inc. (Paragraph), an integrated provider of paper-based packaging, print and point-of-sale products for a broad range of commercial markets.
The transaction was concluded for a total consideration of approximately C$26.6 million (US$19.87m), on a cash-free and debt-free basis, subject to customary adjustments, financed through the Company’s existing credit facility.
Paragraph boasts an exceptional track record for quality, having won several prestigious distinctions while also ranking among Canadian Business’ 500 Fastest Growing Companies in Canada.
Supremex announces record Q1 FY23 results
Meanwhile, Supremex’s total revenue for the three-month period ended March 31, 2023, was C$88.4 million (US$66.05m), representing an increase of C$25.1 million (US$18.75m), or 39.8%, from the equivalent quarter of 2022.
The contribution from the Royal Envelope Corporation (“Royal Envelope”) acquisition was C$12.0 million (US$8.97m), while the contribution from the Paragraph acquisition amounted to C$7.8 million (US$5.83m).
The company says its envelope segment revenue was C$64.5 million (US$48.19m), representing an increase of 44.4%, from C$44.6 million (US$33.32m) in the equivalent quarter of 2022.
The higher revenue reflects the contribution of the Royal Envelope acquisition, an average selling price increase of 40.1% from last year’s first quarter primarily stemming from a more favorable customer and product mix in U.S. operations and from price increases that were implemented throughout 2022 to mitigate input cost inflation, as well as a favorable currency conversion effect.
The envelope segment represented 72.9% of the Company’s revenue in the quarter, versus 70.6% during the equivalent period of last year.
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