The $480 million deal, whereby Canadian company Creo bought Scitex's preprint division for 30% of Creo's shares, has been finalized.
The deal will turn Scitex into the biggest shareholder in Creo, and it will appoint representatives to the board of directors. Rimon Ben-Shaoul, who initiated the deal, and who is the chairman of Scitex board of directors and the general manager of Clal Industries, will apparently sit on Creo's board of directors, together with Scitex general manager Yoav Chelouche. Scitex's spokeswoman declined to confirm or deny the report.
Creo and Scitex develop digital printing and preprint products. Creo, which was set up in 1985 by former Israeli Daniel Gelbart, holds 50% of the global market in this sector. Scitex has 20% of the market, thanks to the Lotem system it developed. By merging their preprint operations, the two companies will gain control of the global market. The deal is apparently aimed at upgrading the two companies' products and increasing the market share of the merged company.
The deal is in line with Scitex's strategy, announced by Ben-Shaoul two months ago, to focus on specific areas of activity, in order to streamline the company and create greater value for shareholders.
As far as is known, the company is not expected to change its business strategy or cut manpower in the near future. Scitex will continue its other operations, including high-speed digital printers, printing machines, and wide-format printing.
Clal Industries bought 6.6% of Scitex's shares ten days ago. The controlling shareholders in Scitex are Clal Industries and Discount Investments, which own nearly equal stakes amounting to 40% of Scitex shares. At the end of last week Scitex was traded at a market value of $682.5 million, and Creo was traded at a market value of $1.3 billion.
Published by Israel's Business Arena January 16, 2000