Heidelberg has sold its coating subsidiary, Hi-Tech Coatings International, in order to focus on core activities.
The purchaser is Innovative Chemical Products, a US company that produces coatings for packaging and product enhancement alongside label release coatings and clear coatings for industrial applications outside print and packaging. The Hi-Tech aqueous and UV coatings will continue to be available under Heidelberg's Saphira brand, along with an expanded range from ICP.
The US company is paying €38.5 million for the business, its three manufacturing sites in Aylesbury, Zwaag in the Netherlands and Taylor in Michigan in the US. The company has 60 staff and in the year to March 2019 produced sales of £10.66 million.
This figure has remained little changed since the company was acquired by Heidelberg on 1 June 2008. In the first 18 months under Heidelberg, Hi-Tech Coatings International generated revenue of £10.97 million. The acquisition was part of strategy to ease dependence on irregular capital equipment sales and to increase revenue from consumables and service.
That search remains, but the emphasis is now on using a subscription model to achieve the more even revenue streams. CEO Rainer Hundsdörfer says: “As part of our portfolio analysis and concentration on our core activities, we have come to the conclusion that we are withdrawing from our own production of packaging and printing coatings. We will us the funds released as a result to push ahead with strategic investments for the future on the path to our own digital transformation.” Heidelberg is expected to retain €20 million from the sale.
ICP is active in building products, including surfaces for sports halls and tracks, and in print the NiCoat and MinusNine coating products. The purchase of Hi-Tech Coatings, expected to be finalised before the end of the year, will expand its product range and expand international coverage into Europe and the fast growing Asia pacific regions.
The company was formed from the prime equity backed merger of California products Corp and Nicoat at the end of 2015 with a strategy of growth through acquisition.
Five years after buying Hi-Tech Coatings Heidelberg took on pressroom chemicals company BluePrint Products, a company which had specialised in eco-friendly pressroom chemicals. Heidelberg was widely expected to continue to increase its portfolio in consumables through acquisition, but no further acquisitions were made. Now an exit to focus on the core engineering and software operations seems more likely.
By Gareth Ward