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Strong M&A activities in the textile digital printing space

The textile printing market is undergoing a transition from conventional printing (rotary screen or flat bet printing) to digital printing (ink jet printing), which will enable manufacturers in the textile processing industry to shift from mass scale long-run to on-demand manufacturing, responding to the increasing demands for fast fashion by short production runs and customisation.

Current growth rates (CAGR) in this industry are approximately 20%, but the overall market penetration of digital prints in printed textiles is still low – below 3%. In the European market the penetration is higher due to trend of small run lengths in a high cost environment and ecological concerns which favour digital printing over conventional printing.

In 2014/15 some key mergers and acquisitions took place in the digital textile printing sector. Stepchange Innovations GmbH has been involved in some of these transactions as technology advisor in the due diligence process.

Private equity financial investors as well as strategic investors and large US corporations have entered the technology driven European digital printing space.

Generally, the mergers create companies with the market reach and financial power of large global corporations blended with the technical capabilities and know-how of specialist companies.

More specifically, these transactions included

Investcorp – SPGPrints

In 2014, the Bahrain-based investment firm Investcorp acquired SPGPrints Group BV, based in the Netherlands, for an enterprise value of 240 mio € from Dutch Bencis Capital Partners.

SPGPrints provides printing products such as screens, lacquers, inks and printing systems to the textile and graphics industries. The company is global market leader of screens for rotary screen printing, a pioneer in digital printing and an important player in digital inks for textile printing. SPGPrints reported revenue of 214 million € in 2013.

EFI – Reggiani

EFI (Electronics For Imaging), a US corporation based in Fremont, California, acquired Italian Reggiani Macchine, based in Bergamo, in a deal worth around €125 million.

Reggiani has 190 employees and customers in 120 countries.

Reggiani‘s inkjet technologies, which will be rebranded as EFI Reggiani, address the full scope of advanced textile printing. Their versatile digital printers are suitable for water-based disperse, acid and reactive dyes inks as well as pigment inks.

EFI is a leading manufacturer of industrial UV-inkjet printers and digital inks, a leader in print industry workflow solutions and has a large global sales and marketing platform. EFI is a public company traded on the Nasdaq stock exchange (ticker symbol EFII).

EFI´s brands include various printing systems such as Vutek and Matan superwide digital inkjet printers, wide formate printers, Etrion industrial digital label printers, Cretaprint® inkjet printers for ceramic tiles with Genuine EFI Cretacolor Inks, Fiery® proServer color management system, Fiery^® Wide Format Products as well as productivity software.

Sensient – Xennia

Sensient Technologies Corporation, a US corporation based in Milwaukee, Wisconsin, has acquired Xennia Technology Ltd., a UK manufacturer of specialty inks used in digital printing. The merger creates a company with Sensient’s market reach and Xennia’s technical capabilities.

Sensient´s annual revenue was 1.4 bio$ in 2014. The company is traded on the US stock market (ticker symbol SXT on NYSE). Sensient is a global manufacturer and marketer of colours, flavours and fragrances. They employ advanced technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, inkjet and specialty inks and colours, and other specialty and fine chemicals.

Xennia is a digital printing technology specialist with own inks – reactive, acid and sublimation inks for printing on textiles and other substrates. Xennia reported revenue of approximately $11.0 million in 2014.

Dover – MS Printing Solutions / Sawgrass-J-teck-Kiian

The big market news in 2014 was the acquisition of the Italian digital printing technology leader MS Printing Solutions S.r.l. , by Dover.

Dover, a US based large corporation headquartered in Downers Grove, Illinois, is a diversified global manufacturer with annual revenues of approximately $7 billion and 26,000 employees. In 2015, Dover´s spending spree was extended by more strategic investments in digital printing by the take-over of the JK group with its various brands.

Dover is engaged in various industries and services such energy, engineered systems, fluids, and refrigeration and food equipment. The company is traded on the New York Stock Exchange (ticker symbol DOV).

MS Printing Solutions is based in Caronno, Italy, and has 70 employees and revenues of approximately $70 million. MS became famous a few years ago by launching the LaRio digital printer, a fast single pass ink jet printer which set a new state of the art in the industry. With this printer technology MS significantly catalyses the conversion of textile printing towards digital printing.

Details of the Dover-MS transaction were not disclosed. In the 2014 annual report (Page 61) it is only mentioned that Dover acquired 7 businesses for a total of 802 $mio. in the particular year.

Dover –Sawgrass- J-teck- Kiian

In October 2015, Dover announced that it has completed the previously announced acquisition of JK Group SPA (“JK”). Headquartered outside Milan in Novedrate, Italy, JK is a manufacturer of digital inks and consumables for textile printing. Their brands include Kiian Digital, J-Teck and Sawgrass Industrial.

Sawgrass Industrial, operating in sublimation and pigment inks for industrial applications, just recently joined the JK Group. Kiian Digital is a manufacturer of digital sublimation, disperse and pigment inks. J-Teck claims to be the leader in sublimation ink innovation, inventor of the nanodot technology, cluster technology, and alkyphenol-free inks.

The addition of JK group will expand Dover`s market position in digital textile printing, which began with the acquisition of MS Printing Solutions. With these acquisitions Dover is now a major player in the industry.

In the next article I will cover some the latest technology developments ion the digital printing space.