Flint Ink and XSYS in US$2.6 billion ink manufacturing merger

Under the auspices of private equity firm, CVC, the American-owned Flint Ink and XSYS Print Solutions, based in Stuttgart, Germany, have agreed to merge. The merged group will rank among the largest ink companies in every region it serves, with an employee base of 8,000 and combined revenues of approximately US $ 2.6 billion based on 2004 figures.

Flint Ink is the largest privately-owned ink manufacturer in the world while XSYS Print Solutions was formed by the merger of BASF Printing Systems and ANI Printing Inks following their respective acquisitions at the end of 2004 by funds advised by CVC Capital Partners.

Completion of the transaction remains subject to approval, where necessary, by regulatory and competition authorities, but is expected to be finalized around 30th September 2005. The new company will be jointly owned by CVC funds and the management of both companies.

Dave Frescoln, currently chief executive officer of Flint Ink, will become CEO of the new group.

Dr. Christian Wildmoser, Managing Director of CVC, commented: “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 is of critical importance for the success of the business.

“We are continuing to globalise the businesses following the needs of our customers in the printing industry. The transaction will significantly strengthen the combined group’s positions in each of its core inks segments.

“The two companies have a perfect regional fit with regard to operations in North America and Europe as well as a complementary product mix. Flint Ink’s presence in Asia means that the merged entity will have a strong presence in the world’s growth markets. The transaction puts the combined group in an excellent position to further drive growth to the benefit of customers, employees and shareholders.”

Flint Ink has a major share of the local ink market with substantial manufacturing facilities on both sides of the Tasman. As this is breaking news these was no opportunity to seek management comment on the likely impact of the merger on the local market.