FIMI’s proposed USD$80m acquisition of Landa Digital Printing has hit a potential speed-hump, midst claims that the administrators - Sigal Rosen-Rechav and Shlomi Filiba – have inserted ‘unauthorized costs’ and ‘an unacceptable and unauthorized deviation’ on FIMI’s original offer. Representing FIMI, partner Gillon Beck acknowledged: “This is a very complex deal. It’s not a walk in the park, it’s very, very difficult, but if we didn’t believe there was a chance of success, we wouldn’t be here.”
Whatever the final outcome of FIMI's proposed acquisition of Landa Digital Printing, it feels unlikely that the industry will witness any more scenes where Benny Landa, microphone in hand, is regaling tales of the future of digital print
The primary stumbling block appears to be in relation to ‘an attempt by the administrators to impose additional costs in the deal that were not part of FIMI’s initial offer’.
These additional costs include huge expenses for a facility in Rehovot ‘that Landa Digital printing has not yet moved into and doesn’t need’ according to Beck. The addendum to the originally filed deal also includes a release from legal claims for managers, including founder Benny Landa.
FIMI’s position is that, if successful in acquiring Landa, it should then be allowed to cancel any unprofitable agreements already signed. The fund has also expressed a willingness to pay the legal fees of the arrangement administrators but not the additional legal claims for managers.
The problem is that Landa owes approximately USD$70m to Vitania in future rent payments for the new, specially constructed building the company is/was set to occupy, and Vitania is a partner in the property along with three of Landa’s private companies.
Acknowledging this complexity, Beck said: “For several years now, Landa Digital Printing has lost about USD$150m annually - that’s roughly USD$12m a month - resulting in a cumulative damage of about USD$1.8bn to shareholders, lenders, and creditors.”
“According to our plan, it will take about three years to reset the company. It would be a mistake not to approve the proposal. There is an opportunity here for hundreds of families to continue, for the company to remain in Israel, and for patents and technologies that may yet succeed.”
Representing FIMI, partner Gillon BeckFIMI has agreed to extend the validity of its original offer, which is widely supported by most of Landa Digital Printing’s creditors, until September 4th, the date set for the court hearing, and proposed to accelerate the closing, reducing the period from seven business days after the decision to just two.
Beck concludes: “The acquisition offer is intended to save the company from collapse, out of a sense of responsibility, mobilization, and deep commitment to the future of Israel’s technology industry. We are prepared to invest significant sums and, if the effort succeeds, to share with the current owners’ payments of up to tens of millions of additional dollars.”
