Xsys, which mainly specializes in making flexo and letterpress plates, has acquired one of its rivals, MacDermid Graphics Solutions, from Element Solutions in a deal worth $325 million.
Element Solutions is a large US-based chemicals company that was originally founded by businessman Martin Franklin in 2013 as Platform Speciality Products. The company was largely financed by Bill Ackman, an American billionaire hedge fund manager. One of the first things that Platform did was to acquire Macdermid Specialty chemicals, which became the main building block of the group. Other acquisitions helped to round out the portfolio, with the company changing its name to Element Solutions in 2019.
McDermid continued to concentrate on its core business, chemistry for metal finishing, operating across several divisions. These include McDermid Alpha, for electronics solutions, McDermid Enthrone, which is mostly industrial processes, McDermid Envio, for wastewater treatment, and McDermid Offshore, which supports oil and gas drilling operations. All of these divisions will continue as part of Element Solutions, but it’s perhaps not surprising that the group has opted to sell the McDermid Graphic Solutions business and to exit its interest in the graphics business.
Benjamin Gliklich, president and chief executive officer of Element Solutions, explained, “MacDermid Graphics is a quality business that is non-core to Element Solutions’ portfolio and long-term vision. Xsys represents a great home for its excellent team. Our portfolio going forward will be more focused and better positioned for even faster growth and greater cash flow conversion with a stronger balance sheet to pursue future growth opportunities in our core markets.”
The sale includes all aspects of the McDermid Graphic Solutions as a reporting vertical, including all shares and assets. Element Solutions says that an existing capital loss should offset nearly all taxable gains from this transaction and that it expects to use any proceeds to further reduce leverage and for general corporate purposes.
This acquisition will help Xsys in a number of ways, partly by removing a competitor, but it will also give Xsys useful manufacturing and market share in North America. McDermid Graphics Solutions is mainly known for its photopolymer flexo plates.
Xsys itself, which is headquartered in Germany, is essentially the former platemaking business of Flint Group. It makes a range of flexo and letterpress plates, for label, packaging and corrugated post print applications, as well as the accompanying imagers and plate processing units.
At the same time, Xsys has also announced a change in its own leadership with CEO Oliver Dohn leaving to pursue other endeavors. He has been replaced by Dr. Alexander Unterschütz, who worked for Linde Engineering for 14 years, most recently leading its Components business. He previously worked as a management consultant with McKinsey & Company.
Dr. Unterschütz commented, “I am delighted to join Xsys as its new CEO and together with the whole XSYS team support its continued success. I am also excited about the combination of Xsys and MacDermid. Both businesses have highly complementary geographic footprints and product portfolios, which will enhance Xsys’ product offering, service levels as well as drive innovations to serve our customers even better.”
Xsys expects to complete the McDermid acquisition in late 2024 or the first half of 2025, subject to the usual closing conditions, adjustments, and regulatory approvals.
Graeme Dickinson, senior vice president, MacDermid Graphics Solutions, said in a statement, “After careful consideration, Element Solutions, MacDermid Graphics’ parent company, has made the decision to sell the Graphics business to Xsys, a global specialist provider in the flexographic printing industry. The sale is expected to close in late 2024 or in the first half of 2025, subject to certain regulatory approvals.
“The combination of MacDermid Graphics and Xsys unites a broad spectrum of products and services, making us a more complete solutions provider for you. The merger will allow us to serve you, our customer, even better by enhancing the combined company’s ability to offer a broader range of products and solutions and by solidifying the strong partnership we have built with you. The combined MacDermid Graphics & Xsys business will have a more complete product portfolio, the geographic reach and the scale to provide even better innovation and customer service for our customers,” Dickinson said.
