Masterwork Group obtains 8.5% in Heidelberg for € 69 million

Masterwork’s investment helps Heidelberg increase capital

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Masterwork Group has obtained 8.5% in Heidelberg shares for € 60 million, which amounts to around 9.2% of the existing share capital. The cash capital increase decided on by the Management Board and Supervisory Board of Heidelberger Druckmaschinen AG (Heidelberg) in March 2019 took place on 22 March 2019, with Masterwork Group Co. Ltd. named as a further strategic anchor investor. Based on the agreed issue price of € 2.68 per share, this represents an inflow of capital amounting to some € 69 million (before transaction costs). The company’s new share capital has been increased to € 779,466,887.68, distributed across 304,479,253 no-par shares. The capital increase has gained Heidelberg another strategic anchor shareholder with a long-term investment horizon that now holds around 8.5% of the company’s shares. The first anchor investor was Ferdinand Rüesch of Gallus, who divested his holding in Gallus to Heidelberg. Since the summer of 2014 and as of February 2019, around 9% of the shares were owned by Ferd. Rüesch AG.

As well as improving shareholder’s equity, the new funds are primarily to be used to accelerate the company’s digital agenda (digitizing products, processes, and business models, for example) and for general business financing. Taking the collaboration with Masterwork, which dates back to 2014, to the next level is also designed to open up further potential in the growing packaging printing segment, especially in China – the world’s largest individual market.

Our view

The entry of another strategic anchor investor with an aggressive focus on packaging equipment is to be welcomed by Heidelberg’s other investors, its partners and customers. The two largest investors now come from the packaging converting and label printing and converting segments. Their active participation in the management of the company should help the largest equipment supplier in the printing and packaging industry emerge to real profitability.

One can look forward to further streamlining of costs and development of future digital technology. Apparently, Masterwork has plans for capacity expansion in its base in China and the Heidelberg sheetfed offset press factory outside Shanghai is extremely flexible as well as close to the still growing Chinese and Asian markets.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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