With just one month left of the two-month ‘stay of proceedings’ - delivered by the court on July 10th when Landa Digital Printing entered a severe cash flow crisis - only two entities have moved forward with in-depth interviews related to the potential acquisition of the company: international printing and computing giant, HP and major Israeli investment fund, FIMI.
Ishai Davidi's Israeli opportunity investment funding arm, FIMI, is one of just two organisations that (along with HP) has shown an interest in acquiring Landa Digital Printing
Landa hired investment bank Nomura to lead the search for new investors, albeit recognising that any potential buyers would likely need to take on all or part of the company’s current USD$500m+ debt.
Nomura opened data rooms to numerous global players, including Canon, Agfa, Fuji, Epson, Xerox, and Brother, but only HP and FIMI moved forward with in-depth reviews, both visiting Landa Digital’s offices in Rehovot last week to meet with senior executives. Whilst progressing to this stage does not guarantee a bid, HP’s interest presents as a strategic opportunity, given potential synergies between its current core printing operations and Landa’s high-end machines, with some customers already using both platforms. HP also previously acquired Landa’s Indigo venture in 2002 for USD$830m.
FIMI’s involvement is a little more surprising. The fund, managed by Ishai Davidi, has not traditionally invested in the printing industry, a space typically dominated in Israel by the Fortissimo fund, which, notably, has not taken part in this process.
Benny Landa, who invested $220 million of his own money in the company, holds a 36.7% stake in Landa Digital Printing, with an additional 4.6% owned by Landa Labs, also under his control. The remaining shares are held by foreign investors who contributed USD$971m in equity and USD$353m in loans later converted into equity (now considered debt). The company’s principal investors include German billionaire Susanne Klatten, through the Altana chemicals group and the SKion digital printing company she owns, as well as the Winder investment firm of Sweden’s Rausing family. Both declined to inject further capital, prompting the request for creditor protection.
Following his success with Indigo, Landa envisioned a second revolution in printing, this time based on proprietary nano-pigment ink. The 55 printing machines developed by the company are heavy (weighing 30 tons), costly (around USD$3m each), and require ongoing, expensive maintenance due to the specialised ink.
The company initially projected breaking even within five years but has recently presented a revised business plan to potential investors, including an extensive USD$60m expense reduction aimed at achieving breakeven in 18 to 24 months. The plan involves raising prices for service contracts, which currently offer fixed rates for ink and maintenance, and reducing material costs through renegotiation with suppliers.
