HIGHCON SECURES FUTURE FUNDING
Israeli digital die-cut and crease solutions developer, Highcon, has secured a fresh round of financing, taken steps to turnaround the business, and will partner with BHS in the corrugated market.
The new financing package sees its three main shareholders; Landa Ventures, Jerusalem Venture Partners and LR Group putting several million dollars into the business, with its manufacturing partner Hameshavev now taking a stake on the business. In addition the convertible loan from SEE (Sealed Air) is being enlarged.
The new funds will total at least $2.5m. However with two new orders, and all other financial injections, the total funds will be around $10m.
As part of the turnaround plan Highcon will cut its staff numbers in half, to around 80, which will reduce its costs by between $6m and $7m, its senior execs will take a pay cut, and it will suspend investment in long term projects for the next 12 months.
As part of the new approach, it has a new partnership with BHS Corrugated. BHS Corrugated and Highcon say that Highcon’s technology is starting to serve "an important role" in the core market of BHS Corrugated. It says BHS Corrugated is convinced that the incorporation of Highcon’s digital die cutting equipment into its Box Plant 2025 strategy can well serve the industry’s needs, as it moves towards greater automation and digitalisation.
Taken to an IPO three years ago, and with an initial valuation of $190m, the company has seen its market capitalisation drop by 94 per cent to just $10m today, and it recorded a loss of $11.5m in the first half of this year.
However, it has high profile customers, including WestRock, which has just ordered it third Highcon Beam 2C.
Highcon chairman Alon Bar-Shany said, “The macroeconomic and investment environment have left Highcon no choice but to slow down its investments in the future and to focus on short term business goals. I am confident that this “back to basics” approach will well-position Highcon to later re-focus on its future product road map.”
Highcon said its customers were having a record year, with the number of jobs produced on its systems up nearly 30 per cent, and jobs per system up 15 per cent.
Benny Landa, digital printing pioneer and long-time Highcon investor and board member added, “My fellow shareholders and I are totally committed to Highcon and its strategic vision. We are proud to be associated with this important and innovative company.”
Highcon will now focus on the execution of its business plan. It says the road to drupa will include announcements focusing on the strategic adoption of Highcon technology by influential users, as well as extensive market activities to share the Highcon vision and solutions with target customers. Highcon will be exhibiting in Hall 9 at drupa 2024 where it will be focusing on folding carton.