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.

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