EFI to be acquired by affiliate of Siris Capital Group

All cash transaction valued at US$ 1.7 billion

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Bill Muir, chief executive officer of EFI.

Electronics For Imaging (EFI), a global leader in customer focused digital printing innovation, has announced that it has entered into a definitive agreement to be acquired by an affiliate of Siris Capital Group, LLC in an all-cash transaction valued at approximately USD 1.7 billion. Siris is a leading private equity firm focused on investing and driving value creation in technology companies that provide mission-critical solutions and are facing technology transitions.

Under the terms of the agreement, which has been unanimously approved by EFI’s Board of Directors, an affiliate of Siris will acquire all the outstanding common stock of EFI for USD 37.00 per share in cash. The purchase price represents an approximately 45% premium over EFI’s 90-day volume-weighted average price ended on 12 April 2019.

EFI may solicit alternative acquisition proposals from third parties during a ‘go-shop’ period over the next 45 calendar days. EFI will have the right to terminate the agreement to enter into a superior proposal subject to the terms and conditions of the agreement. There is no guarantee that this process will result in a superior proposal, and the agreement provides Siris with a customary right to attempt to match a superior proposal.

“We believe this transaction delivers superior and immediate value to our shareholders while providing us with a partner that can add strategic and operational expertise to our business,” said Bill Muir, chief executive officer of EFI. “We are excited to partner with Siris’ highly experienced team on this next phase of growth for EFI.”

Commenting on the transaction, Frank Baker, a Siris co-founder and managing partner, said, “EFI is at the forefront of the digital transition in the imaging and print industry, underpinned by a strong software heritage and culture of innovation. We believe that, by partnering with Siris, EFI will be well positioned to capture this transformational opportunity associated with increased digital inkjet penetration, industrial automation and software enablement. We are eager to partner with management to help the company achieve its strategic objectives.”

Frank Baker, Siris co-founder and managing partner.

Al Zollar, executive partner, Siris said, “EFI has a 30-year legacy of leadership in the digital imaging market, with strong brand equity and a rich history of pioneering innovative solutions for its customers. The company’s portfolio of mission-critical products and services are united by a common thread of impressive technological enablement and software integration. I look forward to supporting EFI’s strong team to help the Company anticipate evolving customer needs and drive new opportunities for innovation and growth.”

EFI’s Board of Directors has unanimously recommended that its shareholders adopt the agreement with Siris. Subject to the go-shop, a special meeting of EFI’s shareholders will be held as soon as practicable following the filing of the definitive proxy statement with the U.S. Securities and Exchange Commission (‘SEC’) and subsequent mailing to shareholders.

Subject to the go-shop, the proposed transaction is expected to close by the third quarter of 2019 and is subject to approval by EFI’s shareholders, along with the satisfaction of customary closing conditions including antitrust regulatory approvals. The transaction is not subject to any financing conditions. Upon completion of the acquisition, EFI will become wholly owned by an affiliate of Siris.

EFI will file its quarterly report on Form 10-Q reporting its first quarter financial results but does not intend to host a quarterly earnings call. EFI currently expects Q1 2019 revenue to be between $220 million and US$ 225 million.

Financing and advisors

Equity financing will be provided by investment funds affiliated with Siris. Siris secured committed debt financing for the transaction from RBC Capital Markets, KKR Capital Markets LLC, Deutsche Bank Securities Inc., Barclays, Credit Suisse and Macquarie Capital.

Sidley Austin LLP is serving as corporate counsel, Kirkland & Ellis LLP is serving as financing counsel, and RBC Capital Markets is serving as M&A advisor to Siris in connection with the transaction. Morgan Stanley & Co. and Greenhill & Co., LLC are serving as financial advisors to EFI, and O’Melveny & Myers is serving as its legal counsel.

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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