As Economy Begins to Improve, Acquisitions Return to the Forefront
During the past few years, the economic slump that impacted a large segment of the global economy changed the way companies handled their business. In particular, businesses were forced to become more conservative, looking for ways to cut costs and generally avoiding major expenditures. As a result, the number of mergers and acquisitions in the ink industry and its suppliers had dwindled.
Perhaps it is a sign that the economy has turned the corner or maybe it is just a case of good opportunities presenting themselves, but the recent burst of acquisition activity indicates that companies are again looking at opportunities to expand their business. During the last month alone, three noteworthy acquisitions were announced:
• CVC Capital Partners (CVC), a leading European private equity firm, acquired the printing inks and printing plates operations of BASF, which consist mainly of BASF Drucksysteme GmbH and other printing system companies, and ANI Printing Inks (ANI);
• Cytec announced plans to acquire Surface Specialties from UCB; and
• Cray Valley and Sartomer acquired Akzo Nobel’s monomer and oligomer business.
CVC’s acquisition of BASF and ANI is the major development for the ink industry. As detailed in Sean Milmo’s story beginning on page 18, the combined annual sales of BASF and ANI are in excess of E830 million ($1.03 billion). Their respective product portfolios are complementary, and this merger creates a leading global supplier of complete printing system solutions.
Cytec’s planned acquisition of Surface Specialties is in line with the company’s growth strategies, which are based on developing technologically advanced customer solutions for global markets. The acquisition of Akzo Nobel’s Photocure resins business increases Sartomer and Cray Valley’s presence in functional additives for UV-cure applications.
Outside of these deals, Wikoff Color, a company that typically does not engage in acquisitions, recently purchased Century Color and Merit Ink & Coating. These acquisitions give Wikoff Color added geographic presence in the Northeast and sophisticated new technologies, as can be seen in the story beginning on page 28.
These acquisitions make sense for a variety of reasons, and they signal that companies are again willing to make moves that will enhance their business.