Deal in Focus: Bencis and Gimv ink trade sale for Xeikon

Two years after its €168m take-private by Benelux GPs Bencis Capital Partners and Gimv, Dutch printing technology specialist Xeikon has been taken into corporate hands after an agreement between the firms and trade buyer Flint Group.

Announced in late November and awaiting approval by competition authorities, the trade sale is expected to go through before year-end. The deal will see Bencis and Gimv divest the 95%-plus stake they hold via the XBC newco to Flint Group.

The new parent, a Luxembourg-headquartered printing supplier, will place Xeikon within its new subsidiary Flint Group Digital Printing Solutions, to be headed by Xeikon CEO Wim Maes.

The integration within a global corporate will accelerate international expansion for Xeikon, which was founded at its Eede headquarters in 1988. Since that year, the business has set up shop in Lier, Belgium, where its manufacturing and R&D centre is based, and opened additional offices in the Nordic region, Germany, the US, Japan and Mexico, among others.

As it expanded worldwide, Xeikon has developed to sell web-fed colour presses under its namesake brand and provide platemakers to printing and flexographic businesses through the basysPrint and ThermoFlexX subsidiaries, respectively.

Put together, its operations led to sales understood to be around the €130m mark; a figure which mirrors the €132.8m being generated when Bencis- and Gimv-backed its 2013 take-private.

Take-private team up
According to Gimv, the sale will result in €5.2m in proceeds for its co-investment unit Gimv-XL, €2.2m of which will be reaped by its listed arm Gimv NV.

Speaking to unquote", a source close to the situation explained the Belgian GP approached Bencis in the run-up to the delisting of Xeikon in 2014. According to the source, Gimv-XL was keen on a co-investment partner to help finance the larger equity check.

Having listed under its previous Punch Graphix name in December 2007, Xeikon saw its shares taken private via newco XBHC. Gimv-XL secured a 20% stake in the holding company, while a number of Xeikon's managers picked up a combined 2.6%.

The delisting, valuing Xeikon at €168m, saw Bencis and Gimv-XL acquire a 65.68% stake in July 2013. The equity from both firms financed 47.8% of the offer, while the remaining 41.7% and 10.5% was injected in the form of senior and mezzanine debt, respectively.

Bencis deployed capital from its fourth fund, which broke its €400m hard-cap when it closed on €408m in November 2011. The vehicle was most recently used for the acquisition of Dutch B2B insurance broker Boval Groep.

Benelux SBOs closing the gap
The trade sale to Flint is the 16th witnessed by unquote" in Benelux between January and November 2015. Indeed, selling to corporates remains the most popular exit route for GPs in Benelux, with these transactions representing 38% of all exits. The ratio is identical to the figures recorded in the same period last year, with 26 trade sales out of a total 68 divestments.

However, secondary buyouts appear to be catching up in the Benelux, climbing from 31% of all exits between January and November 2014 to 35% during the same period this year.

The gap has all but disappeared in terms of deal size, with pass-the-parcel transactions producing 46% of all exit-related aggregate value in the region, up from 19% last year. Meanwhile, trade sales have experienced the opposite trend, going from 49% of Benelux exit equity between January to November 2014, down to 33% this year.

The swelling levels of secondary buyouts is a mounting concern for European private equity, with local players recently linking it with current deal shortage and warning of lower return potential.

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Xeikon – Wim Maes

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