"Scitex was always attacked for not utilizing the cash it has," said Scitex president Yoav Chelouche today. "So we are now pleased to make use of it."
Simultaneous to the publication of annual financial reports, Scitex today announced the acquisition of Israeli company Idanit, for $60 million in cash. Following the purchase, Scitex will record a one time $40-45 million write off in the first quarter, as expenses for R&D.
Idanit currently employs 80 workers, and last year completed development of a digital printing machine for wide format printing. The company began selling the machine in ’97, and achieved a $13 million turnover. The company has not yet shown a profit this year, but came close to an operating profit in the fourth quarter.
Idanit’s major shareholders today are two foreign, private investor groups (American and European), who invested a total of $10 million in the company. The holdings of the two groups are 70%, fully diluted, and are worth $42 million.
One of Idanit’s directors is none other than the founder of Scitex, Efi Arazi. His joining the company was based on professional considerations, and as far as it is known, he is not one of the shareholders or investors in Idanit.
Idanit is rapidly growing, and the company considered issuing shares on Wall Street during ’98. In advertisements for personnel, the company even mentioned its intention to do so.
The contact with Scitex was based on business considerations, since Scitex was chosen as distributor for Idanit in the Far East. At this stage, Scitex plans to leave the company as a separate division, and not integrate it in its digital printing division. At a later stage, possible co-operation between the company and other divisions will be reviewed. Scitex also clarified that acquisition of the company was made in cash, and not through shares, since company shareholders estimate that Scitex shares are currently being traded below value.
Idanit specializes in digital service bureau market segments, providing solutions for short and medium print runs of point of purchase displays, banners, fleet marking and outdoor advertising. The company’s machines are designed for runs of between 500 and 1,000.
Published by Israel's Business Arena February 12, 1998