German specialty chemicals group Altana is investing $135 million (€100 million) in Landa Corporation unit Landa Digital Printing in an equity financing agreement. The proceeds will be used for completing the development of Nanography, Landa’s water-based digital printing process, including engineering and production ramp-up of Landa Nanographic Printing Presses and building of manufacturing plants for Landa Nanoink colorants.The process involves ink, nanometric in size (one billionth of a meter) allowing high quality and efficiency in printing, mainly for the commercial market.
Altana's investment is for minority rights in the company. Altana said that, "Both companies see the agreement not only as a financial investment, but also as a starting point for a long-term strategic partnership to bring digital printing solutions to the commercial, packaging and publishing markets. Other units of the Landa Group, including Landa Labs and Landa Ventures, are not included in the transaction."
Landa told "Globes,""Altana has annual revenue of €1.8 billion and is found in many places in the printing industry and that's what is relevant for us. Altana has four subsidiaries, three of which are involved in our industry and that's what makes them a strategic investor. One of the subsidiaries manufactures additives for colored inks, and another manufactures pigment ingredients, and one manufactures printing coatings so that they really go together with our activities."
He added, "That said, although it is a strategic investor it is not in the printing machinery market so have no competitive conflict, and that's what makes it a special investment."
Landa's company exhibited its products already in 2012 and started looking for investors, a process that continued a rather long time. "The truth is that we didn't think there were any such investors. We were looking for a financial investor," Landa remarked. "When we realized that the size of the investment would make it hard to find one investor, the alternative was to make an agreement with a group of financial investors which we really didn't want to do. The reason is that when you have a group like that, you have to deal with investor relations, instead of managing the business. It's pretty selfish I want to engage in productive things. I prefer an investor who understands things and a board of directors consisting of people in the sector, not just bankers and accountants who represent investors."
What is the next stage?
"Two years ago, we launched the products at an exhibition, and got almost $1 billion in orders for printers. That was reason why we had to raise money, because we were expanding infrastructure preparing production plants for ink for machines and enlarging engineering teams. That's a very big investment. Up until now, I've been financing the company alone, and this is too big for a private person."
The company currently has 200 employees, and is on an upswing. "Right now, 100% of the activity is in Israel. The plan is for most of the activity to stay in Israel in the future," says Landa. "In a global business, of course, you need local production of ink, because customers can't be dependent on a single source. We'll set up ink plants around the world when the time comes." Landa also points out that "Just as with HP (which acquired Indigo, the company founded by Landa, S. H-V), one of my conditions for a deal was that the investor has to support industry in Israel, and further R&D and production has to be Israeli."
Will the company make an IPO in the future?
"Who knows? We have no plans right now for any offering or additional capital raising. This investment will see us through until we make a profit, and as of now, we aren't planning anything beyond that.
“We are extremely excited to be partnering with an industry visionary like Benny Landa. We speak the same language in terms of innovation,” said Altana CEO Dr. Matthias Wolfgruber. “I am confident that we are investing in a game-changing technology that can enable the printing industry to thrive in the 21st century and help our customers position themselves well for the future.”
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2014
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