UK-based CVC Capital Partners, a private equity firm that owns Xsys, said the merger will give the company a larger North American base and createthe world's second-largest printing ink maker in an increasing consolidating market. Both companies manufacture ink for wide variety of industries, including publishing and packaging. The ink industrycurrently has excess capacity, while prices are under pressure from rising raw material costs.
The two companies jointly stated that by building a bigger provider of inks, it is following its customers, who are increasingly becoming global companies. Flint Ink also has plants in Asia.
"By building the second largest ink manufacturer in the world, Flint Ink, Xsys and CVC are creating a stronger competitor better placed to serve customers in a fragmented market, where size isof critical importance for the success of the business," the companies stated yesterday. "We are continuing to globalise the businesses following the needs of our customers in theprinting industry."
The merger tops the announcement last month by Germany-based Siegwerk Group, which plans to acquire the packaging ink division of Swiss-based Sicpa. The acquisition will create a company withconsolidated total net sales of €613m in the packaging ink segment. At the time Siegwerk said it would emerge as the world's second-largest manufacturer of packaging ink.
The top printing ink manufacturer in the world is US-based Sun Chemical.
No financial details of the Xsys and Flint merger were disclosed. The merged group will be jointly owned by CVC funds and the management of both companies. The revenues of the two companies add upto about €2.1bn, the companies said in a joint statement. The transaction is expected to be completed by the end of September 2005.
Flint Ink is the largest privately-owned ink manufacturer in the world. Xsys Print Solutions was formed by the merger of BASF Printing Systems and ANI Printing Inks. The main products sell underthe brand names of K+E and ANI. Xsys has 60 subsidiaries in 30 countries and produces printing inks and plates for the graphics and packaging industry.
In June this year Xsys Print Solutions announced it was teaming up with Microtrace to market a variety of traceable, anti-counterfeit inks to food processors and the tag and label industry.
The global packaging printing inks market is estimated to be worth about €4.4bn ($5.3bn), while the global printing inks market is valued at more than €10bn, according to some industryestimates.