CVC buys BASF unit, announces merger

CVC Capital Partners, the pan-European private equity firm, has acquired the printing inks and printing plates unit of Germany’s BASF and will merge it with a Swedish rival.

BASF Printing Systems, comprising BASF Drucksysteme and other printing system companies, has been sold to pan-European private equity firm CVC Capital Partners by BASF

The consideration for the transaction has not been officially disclosed, though newspaper reports have estimated it at between €600 million and €700 million. The deal is subject to regulatory approval.

The sale includes all the BASF printing system facilities and activities, including pigment production at BASF Colorants & Chemicals Co in Shanghai and the production of alkali blue at the BASF Corporation plant in Huntington, West Virginia.

Headquartered in Stuttgart, Germany, BASF Printing Systems employs 2,600 staff across 16 companies in Europe, the US, South America and Asia. In 2003, the unit posted sales in excess of €600 million on an undisclosed operating profit.

CVC has announced that the first stage of its ownership will see the unit merged with Swedish printing inks manufacturer ANI Printing Inks, which has also been acquired by CVC for an undisclosed sum. CVC said ANI’s product portfolio and regional coverage are “very complementary” to BASF. The merged entity, with annual sales of more than €830 million, will be based in Stuttgart.

ANI, which produces and markets printing inks and additives for the graphics and packaging sectors, has subsidiaries in most of Europe as well as China, South Africa, Brazil, Morocco, Malaysia, Thailand and the US. Headquartered in Trelleborg, Sweden, the firm employs 960 staff and had sales of €231 million in 2003.   

BASF first developed a printing plates capability in 1965. In 1970, it started its own printing inks business with the acquisition of Stuttgart’s K+E. BASF Printing Systems, which was founded in 1997, has operated on a largely standalone basis since then. In recent years, it was decided that printing plate technology was an increasing divergence from BASF’s core chemicals business.

“We are making a decisive contribution to consolidation in a fragmented industry by merging BASF Printing Systems and ANI,” said Dr Christian Wildmoser, managing director of CVC. “As a result of the acquisition, BASF Printing Systems will become a core business and the merger with ANI will ensure that in the future a leading printing systems business will not only be able to maintain its market position, but expand it further.”

CVC closed its most recent fund at $4 billion in 2001, and is expected to commence a new fundraising next year.