The sale of EFI to Siris private equity has been completed, with 99.7 per cent of voted shares voting in favour of the US$1.7bn transaction. Siris has installed former Xerox CEO Jeff Jacobson as executive chairman of EFI, giving the PE firm the industry insight it needs.
Siris paid US$37 a share, a 45 per cent premium on the 90 day weighted share price, in a leveraged buyout that saw it stump up around US$700m and put a US$1bn debt onto EFI. EFI has now exited the Nasdaq, with its 90 day reporting cycle.
Siris has an investment strategy of buying companies that have a strong legacy business and cash flow, together with the potential to dominate markets through technology disruption. In EFI it sees the Fiery, MIS and wide format inkjet as its income base, while in digital corrugated printing and digital textile printing, it sees the company well positioned to become a major player in what could be huge markets in the next few years.
Speaking to Print21, EFI chief financial officer Marc Olin said, "The deal will allow EFI to do good things. It will drive investment in high growth areas including digital corrugated and digital textile printing. It will also allow us to continue to invest in our Fiery, wide format and MIS operations. For the company, our customers, and our employees, the Siris investment is good news."
According to Olin, the digital corrugated printing equipment and inks market will rise from its current small base to $9bn, while he expects the textile digital printing equipment and inks market to hit $4bn. He said, "We anticipate EFI will be the largest player in the market. We recognise other companies are positioning themselves there too, and see that as a positive as it will all help drive the market."
EFI CEO Bill Muir also hailed the possibilities the deal offered.
“This acquisition marks a new, exciting path forward in EFI’s 30-year history as a digital imaging technology leader. With Siris’ partnership, we will look to create new opportunities for our customers, partners, and EFI employees worldwide. We are looking forward to working with Siris to write the next chapter of innovation across our growing portfolio of solutions,” he said.
Jeff Jacobson, Siris executive partner and EFI executive chairman, added, “EFI’s portfolio of best-in-class solutions presents an exciting opportunity to drive further growth in high-quality inkjet and integrated, digital workflows. I look forward to working closely with management and know Siris is committed to providing the guidance and support needed to help EFI continue accelerating the transformation of industries where colourful images matter.”
For EFI, the Siris money will provide the injection it needs to take the company forward into new areas it needs in order to grow the business, as its legacy divisions, while delivering cash flow, have limited growth opportunities. And, as EFI will delist from the Nasdaq, it will take the company out of the 90 day reporting cycle which consumes a fair amount of management focus.
EFI is one of the biggest technology companies in print, with a global reach. It develops and manufactures inkjet printing systems for multiple applications, along with digital workflow and MIS, plus the Fiery rips on which the company was established and which essentially drove toner based digital colour printing.
It is a major supplier to the Australian and New Zealand print industries, having been established in 1989 by Israeli genius Efi Arazi, who had previously founded Scitex, Israel's first high tech company. Sales in the first year were around $2m, and last year they touched the $1bn marker.