In a shock announcement this evening (29 January) Heidelberg said that the sale of the label press manufacturer did not complete.
“Benpac Holding AG did not make the purchase price payment of €120m agreed at today's closing, although all the necessary conditions were met,” it said in a statement.
“Heidelberg had to assume until the very end that the transaction would be completed successfully. Heidelberg will assert its rights.”
The deal was agreed last summer. Benpac is a privately-owned group that has grown through a number of acquisitions. In 2019 it acquired Muller Martini’s manufacturing facility in Stans, Switzerland, where Benpac is headquartered.
Heidelberg had expected to make a gain of “mid two-digit million-euro” on the deal, which was originally expected to be finalised by the end of last year.
Heidelberg said that the five Gallus sites and around 430 employees will now remain with Heidelberg, and told customers that “nothing will change”.
“Heidelberg will continue to handle sales and service for the Gallus portfolio and their personal contacts will remain the same. Heidelberg will now be examining various options for the corporate future of Gallus,” the group stated, adding that Gallus had made “good operational progress in 2020 under the Heidelberg umbrella.
The world’s largest press manufacturer also moved to reassure investors that its transformation programme was having an effect, with net debt reduced and liquidity improved.
“As a result of the accelerated M&A program, Heidelberg will generate proceeds in the mid-double-digit million euro range from the transactions completed in December 2020 alone,” the firm asserted.
Heidelberg also said that, despite the setback, it still expected to achieve its financial targets for the year ending 31 March.
“The market remains challenging due to the currently worsening Covid-19 situation. Heidelberg is therefore systematically continuing its transformation course with the measures initiated for this purpose in order to create further financial scope. In operational terms, the third quarter of the current financial year saw a continuation of the upward trend in sales and incoming orders that has been ongoing since May 2020.”
The announcement came after Germany’s DAX stock market had closed for the weekend.
Benpac had not commented at the time of writing.
The Gallus sites involved are Gallus Holding and Gallus Ferd. Rüesch in St Gallen Switzerland, and German operations Gallus Druckmaschinen in Langgöns, Heidelberg Web Carton Converting in Weiden in der Oberpfalz, and Menschick Trockensysteme in Renningen.
Since mid-January Heidelberg's share price had been on the rise, and was at €1.31 prior to market close.
Heidelberg originally acquired a 30% stake in Gallus Group in 1999, and took the business over in the summer of 2014.
Ferdinand Rüesch had been expected to remain with the Gallus business and was still the second biggest shareholder of Heidelberg (behind Masterwork Group) and a member of its supervisory board.
