Heidelberg Sheds Digital & Web Press Operations
Eastman Kodak and Goss International gain units as press builder focuses on sheetfed.
Staff -- graphic arts online, 4/1/2004
To better focus on its core sheetfed offset business and regain profitability, Heidelberger Druckmaschinen AG of Germany plans to hand over its digital print division to Eastman Kodak Company and its web offset division to Goss International.
The transactions, expected to close once the necessary antitrust approvals are obtained, were announced March 8 by Heidelberg chief executive Bernhard Schreier.
In its new alignment, Heidelberg will focus on the sheetfed offset, prepress, and finishing businesses, along with their attached workflow systems, training, and service activities. Integration of digital printing in print shops' workflows, using Prinect, are to remain part of Heidelberg's service offerings.
The digital print agreement involves Heidelberg's black-and-white business (Heidelberg Digital LLC, Rochester, N.Y.), its 50% share in the Heidelberg/ Eastman Kodak joint enterprise venture (NexPress Solutions LLC, Rochester, N.Y.), and its 100% share of NexPress GmbH in Kiel, Germany. In all, about 2,000 people worldwide are employed in Heidelberg's digital business, which accounted for about $300 million in fiscal 2002-03.
In the agreement, Kodak will pay no cash at closing. However, it will make payments to Heidelberg until December 31, 2005, up to a maximum of $150 million, on a performance-based, earn-out formula based on achievement of certain sales goals.
Heidelberg, which agreed not to engage in competitive activities related to its digital division for the next two years, will not be directly responsible for digital sales but will have a financial incentive to work closely with Eastman Kodak to facilitate such sales. Additional Kodak payments could extend over a five-year period.
Venkat Purushotham, who has served as president and chief executive of NexPress Solutions since its creation as a 50-50 joint venture in 1997, is to lead the combined organization, which will become part of Kodak's commercial print segment.
The present worldwide installed base includes about 4,000 monochrome Digimaster units and more than 300 NexPress 2100 systems.
The second agreement involves the transfer of Heidelberg's commercial web and newspaper presses, as well as the company's web finishing business in the U.S., to Goss International, which is based in Bolingbrook, Ill. and is headed by Bob Brown, chief executive. In the last fiscal year, that operation billed about $530 million; it employs nearly 2,100 people in New Hampshire, France, and the Netherlands.
