A private equity group is poised to acquire Efi. The MIS to corrugated printing company has agreed to a $1.7 billion all cash deal from Siris Capital Group.
The takeover will remove Efi from the stockmarket and provide the backing to push it to the next phase, ramping up production of inkjet presses for corrugated packaging and textile as necessary.
The move comes just months after Bill Muir stepped into Guy Gecht’s shoes as CEO. He has welcomed the deal saying: “We believe this transaction delivers superior and immediate value to our shareholders while providing us with a partner that can add strategic and operational expertise to our business.
“We are excited to partner with Siris’ highly experienced team on this next phase of growth for EFI.”
The Siris strategy is to identify investments on what it calls a bond and call approach. These are business where is a strong legacy business associated with ongoing payments. This is the bond element. And where there is potential for robust growth through market disruption, becoming the call element.
If MIS, Fiery and to some extent the wide format divisions represent the bond element, inkjet corrugated and textile printing represent the ‘call’. The company's Nozomi inkjet corrugated press is steadily gaining users and investment might accelerate production of these machines to exploit Efi's technology lead. The company is likewise poised to benefit as the global textile industry shifts to digital printing.
The investor works with the management team to achieve this. Beyond this, Muir has a strong interest in artificial intelligence, how software can be used to improve the efficiency of a business where the combination of products that Efi has has the potential to be transformative.
Siris co founder and managing partner Frank Baker says: “EFI is at the forefront of the digital transition in the imaging and print industry, underpinned by a strong software heritage and culture of innovation. We believe that, by partnering with Siris, EFI will be well positioned to capture this transformational opportunity associated with increased digital inkjet penetration, industrial automation and software enablement. We are eager to partner with management to help the company achieve its strategic objectives.”
Siris executive partner Al Zollar will join the Efi board saying “I look forward to supporting Efi’s strong team to help the company anticipate evolving customer needs and drive new opportunities for innovation and growth.”
While neither Zollar nor any of the Siris team has direct connections with the printing industry, Siris recently acquired Travelport where, until 2014 Jeff Clarke, most recently CEO of Kodak had been CEO and a board member.
The transaction has the unanimous endorsement of the Efi board. Shareholders are being offered $37 for each of their shares, a 45% premium over the 90 day average. The board has the option of seeking a higher offer, which under the terms of the agreement Siris can choose to match, though this is not considered likely. The acquisition is expected to close within the next six months.
Nozomi is gaining traction for inkjet printing on corrugated for both display print and packaging. The same engine is begin Bolt, an inkjet press which could be as transformative in textile printing. This is part of the potential that Siris is backing with its $1.7 billion acquisition of Efi.