Ms. Isabelle Marcoux reports

TRANSCONTINENTAL INC. ENTERS INTO AGREEMENT TO SELL ITS PACKAGING BUSINESS

Transcontinental Inc. has entered into a stock purchase agreement with ProAmpac Holdings Inc. and certain of its subsidiaries (collectively, the buyer), pursuant to which the buyer has agreed to purchase all of the issued and outstanding shares of capital stock of entities which carry on the business of the corporation's packaging sector. The transaction will result in the divestiture of the corporation's entire interest in the packaging sector. All amounts in this press release are in Canadian dollars, unless indicated otherwise.

The aggregate purchase price payable to the corporation, which implies an enterprise value of approximately $2.22-billion inclusive of assumed indebtedness and lease obligations under IFRS (international financial reporting standards), is approximately $2.10-billion, subject to customary adjustments for debt and debt-like items, cash, and net working capital. The corporation expects to make a cash distribution to its shareholders of approximately $20.00 per share on Class A shares and Class B shares (based on the corporation's current issued and outstanding Class A shares and Class B shares as of Dec. 5, 2025).

The transaction is subject to shareholder approval, regulatory approvals and other customary conditions.

Immediate value realization

Based on the agreed consideration and anticipated net proceeds, the transaction represents a compelling valuation for the packaging business and is expected to deliver a meaningful return to TC Transcontinental's shareholders.

"This transaction delivers immediate and significant value to our shareholders, with net proceeds representing a substantial premium to the value of the packaging business within TC Transcontinental's share price. In this period of industry consolidation, we are maximizing shareholder value by acting decisively and from a position of strength. It highlights the quality of our packaging assets, and the talented people who helped us build this business -- whom I want to sincerely thank for their dedication and contribution," said Isabelle Marcoux, executive chair of the board. "I believe that TC Transcontinental Packaging has found an exciting new home, and I am confident that ProAmpac will be a strong cultural fit for our employees and that the combination will be well positioned to deliver increased value to customers.

"As we approach our 50th anniversary, TC Transcontinental is once again reinventing itself. We are excited to open a new chapter in our history, with a sharp focus on advancing the transformation of our retail services and printing and educational publishing businesses. The new TC Transcontinental will be a strong Canadian company, with its head office in Montreal, fully committed to growing its presence in Canada -- both organically and through acquisitions -- and to creating long-term value for its shareholders," she added.

"This agreement is in the best interests of the corporation and of our shareholders, as well as the customers and employees of TC Transcontinental Packaging," said Thomas Morin, president and chief executive officer, TC Transcontinental. "Our packaging colleagues will be joining a flexible packaging industry leader with an entrepreneurial culture and a shared commitment to safety, customer service, sustainability and innovation. I am grateful for the dedication and engagement of our teams in proudly building this business over the past 11 years. This transaction will allow us to concentrate our resources on our retail services and printing and educational publishing activities."

"This acquisition is a transformative milestone for ProAmpac and TC Transcontinental Packaging. Through TC Transcontinental Packaging, ProAmpac is broadening its end-market focus to include protein, dairy and medical segments, and expanding its geographic presence. Together we are committed to delivering high performing and increasingly sustainable packaging solutions to customers," said Greg Tucker, founder, vice-chairman and chief executive officer of ProAmpac. "TC Transcontinental Packaging and ProAmpac share the same dedication to excellence, customer focus and doing business the right way. We are thrilled to welcome the TC Transcontinental Packaging team into the ProAmpac family."

Transaction details

The transaction implies an enterprise value of approximately $2.22-billion, which represents an acquisition multiple of approximately 8.7 times the packaging sector's LTM (last 12 months) adjusted operating earnings before depreciation and amortization as of July 27, 2025, on an IFRS (international financial reporting standard) basis, or 9.0 times the packaging sector's LTM adjusted operating earnings before depreciation and amortization as of July 27, 2025, on a pre-IFRS basis. The aggregate purchase price payable to the corporation in cash is approximately $2.10-billion, and is subject to customary adjustments for debt and debt-like items, cash, and net working capital. Completion of the transaction is subject to shareholder approval, applicable regulatory approvals and other customary closing conditions. The stock purchase agreement contains, among other things, customary provisions that allow the board to consider unsolicited superior proposals, subject to standard right to match and break-fee provisions.

The transaction will constitute the sale of all or substantially all of the assets of the corporation pursuant to the Canada Business Corporations Act, and accordingly will require the approval of at least two-thirds (66.67 per cent) of the votes cast by holders of Class A subordinate voting shares and Class B multiple voting shares. The corporation will seek approval of the transaction by its shareholders at a special meeting of shareholders. The corporation currently expects to mail the management proxy circular in connection with the meeting to shareholders on or before Dec. 19, 2025, and to hold the meeting by the end of January, 2026. Subject to the satisfaction (or waiver) of applicable closing conditions and the receipt of applicable regulatory approvals, the transaction is expected to close in the first quarter of calendar year 2026.

Board recommendation

The board of directors of the corporation (with one interested director abstaining) has unanimously determined that the transaction is in the best interest of the corporation and will unanimously recommend that shareholders vote in favour of the transaction at the meeting. Capinabel Inc., the corporation's largest shareholder, has entered into a voting agreement to vote in favour of the transaction at the meeting. As of Dec. 5, 2025, Capinabel beneficially owns 8,714,884 Class B multiple voting shares, in the aggregate carrying approximately 65.96 per cent of the votes attached to all of the outstanding shares of the corporation.

CIBC Capital Markets and RBC Capital Markets each provided an opinion to the board of directors that, as of the date thereof and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by the corporation pursuant to the transaction was fair, from a financial point of view, to the corporation. Copies of such fairness opinions will be available in the management proxy circular that will be prepared for the meeting. The opinions of CIBC and RBC are not recommendations as to whether or not any shareholder of the corporation should vote to approve the transaction or any other matter.

Further information regarding the transaction will be included in the management proxy circular that will be prepared for the meeting. The description of the transaction in this news release does not purport to be complete and is subject to, and qualified in its entirety by reference to, the contents of the management proxy circular. Shareholders are encouraged to carefully review the management proxy circular when it becomes available.

Use of proceeds

In the event the transaction is ultimately approved at the meeting, the corporation expects to distribute approximately $20.00 to shareholders upon closing, through: (i) a reduction of stated capital of approximately $7.00 per Class A share, and less than $1.00 per Class B share, and (ii) a cash dividend distribution for the balance of the expected distribution. Any capital reduction is subject to shareholder approval.

The corporation expects a pro forma net indebtedness ratio of approximately 1.7 times post-transaction, reflecting deleveraging from the sale and prudent capital allocation.

Following the distribution, the corporation expects to maintain a strong liquidity position to support disciplined investments, subject to board approval and market conditions.

Financial outlook

Detailed information regarding the transaction, including pro forma financial information showing the expected impact of the transaction on the corporation's continuing operations, will be included in the management proxy circular that will be prepared for the meeting.

Management has made preliminary estimates of selected financial information regarding the packaging sector and the corporation's continuing operations following the closing of the transaction to provide shareholders with an indication of the relative size of the remaining business. These preliminary estimates are based on the last 12 months ended July 27, 2025, including an estimate of the impact of the transaction.

These preliminary estimates have not been audited or reviewed by any third party, have been derived from internal management reporting, and reflect sales, cost and expense allocations, including with respect to corporate expenses, as well as other estimates and adjustments, each of which is preliminary in nature and subject to change.

For the 12 months ended July 27, 2025, the packaging sector generated revenues of approximately $1.6-billion, operating earnings of approximately $157-million, and adjusted operating earnings before depreciation and amortization of approximately $255-million. Posttransaction, the corporation expects a more streamlined profile with robust free cash flow generation.

For the 12 months ended July 27, 2025, adjusted operating earnings before depreciation and amortization is approximately $470-million for the corporation, and approximately $215-million for the corporation excluding the packaging sector. For the same period, operating earnings is approximately $276-million for the corporation and approximately $119-million for the corporation excluding the packaging sector. For the same period, pro forma revenues for the corporation excluding the packaging sector would have been approximately $1.2-billion.

The corporation will update its outlook at or following closing to account for the transaction.

Advisers

CIBC Capital Markets and RBC Capital Markets are serving as financial advisers to TC Transcontinental, and Stikeman Elliott LLP and Morgan Lewis & Bockius LLP are serving as legal counsel.

Conference call

The corporation will host a conference call at 8:30 a.m. on Dec. 8, 2025, to discuss the transaction. The call can be accessed by dialling 1-289-514-5100. A live audio webcast and replay will be available on TC Transcontinental's website.

About Transcontinental Inc.

TC Transcontinental is a North American leader in flexible packaging, a Canadian retail marketing services provider, Canada's largest printer and the Canadian leader in French-language educational publishing. Since 1976, TC Transcontinental's mission has been to create quality products and services that allow businesses to attract, reach and retain their target customers.

Respect, teamwork, performance and innovation are the strong values held by the corporation and its employees. TC Transcontinental's commitment to its stakeholders is to pursue its business activities in a responsible manner.

Transcontinental Inc., known as TC Transcontinental, has approximately 7,600 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental generated revenues of $2.8-billion during the fiscal year ended Oct. 27, 2024.

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