Flint Group, the world’s second largest printing ink manufacturer, was acquired today by Goldman Sachs Merchant Banking Division and Koch Equity Development LLC, a subsidiary of Koch Industries, Inc. Goldman Sachs and Koch Equity acquired 100% of Flint Group’s share capital from funds advised by CVC Capital Partners, a private equity firm.
Reuters and Bloomberg reported that Flint Group was valued at $3 billion (€2.2 billion) for the deal, which is subject to customary closing conditions and should be completed by the second half of 2014. Reuters also reported that the company will reduce its debt, estimated at approximately €1.8 billion, by 20% through this deal.
A leading manufacturer of inks, flexographic printing plates, blankets, image transfer products and chemicals for press rooms, to the packaging and the print media industries, Flint Group has annual sales of €2.2 billion and 6,600 employees. The company will continue to target the packaging printing market while maintaining its strong position in print and publication media.
“The management team of Flint Group is excited about this planned new ownership, and the opportunities this now presents,” said Antoine Fady, CEO of Flint Group. “The investment by Goldman Sachs Merchant Banking and Koch is a clear vote of confidence in our vision, strategic plans, and ‘can do’ culture. Flint Group’s fundamental dedication to safety, sustainability, integrity and compliance will continue to form the foundation of all of our business activities.”
Fady added that the transition “will be seamless for Flint Group’s customers, employees and suppliers.”
Martin Hintze, co-head of Corporate Equity Investing in Europe for Goldman Sachs Merchant Banking Division, told Reuters that Flint Group will look to grow through organic sales and acquiring other companies, and added that the company has a “list of potential takeover targets.
“The acquisition of Flint Group fits well into our strategy of investing in leading global franchises and growing them organically and through acquisitions,” Hintze said in a statement. “We look forward to working in partnership with Koch Equity Development and Flint Group’s strong management team to execute on their strategy.”
“With a significantly improved capital structure, Flint Group is best positioned to pursue its ambitious growth plans to further strengthen its market leading positions,” added Matthias Hieber, head of Corporate Equity Investing in the German Speaking Region of Goldman Sachs Merchant Banking Division.
“Flint Group is an exciting opportunity for Koch Equity Development,” said Brett Watson, managing director of Koch Equity Development. He adds, “Flint Group is a global leader with a clear strategy and a management team that has a consistent record of delivering results.”
“Partnering with top-tier firms like Goldman Sachs and investing in competitively advantaged businesses with high quality management teams is consistent with Koch’s investment strategy,” added Matt Flamini, president of Koch Equity Development. “We look forward to working with Goldman Sachs and Flint Group to assist the company in transitioning to its next phase of growth.”
CVC began to construct the present day Flint Group in 2004, with the acquisition of XSYS Print Solutions, which was formed out of the ink operations of BASF SE and Akzo Nobel NV. In 2005, CVC acquired Flint Ink, forming Flint Group, and has bolted on other ink and printing suppliers since then, most notably Day International in 2007.
“For almost 10 years, CVC has helped to build Flint Group through a series of acquisitions into the global leader it is today,” CVC partner Chris Wildmoser said. “We are pleased that, with Goldman Sachs and Koch Equity Development, we have found new owners who will continue to pursue this strategy in further developing the company.”