Regular readers may remember that at the end of last year I reported on a proposed takeover of Global Graphics, developer of the Harlequin RIP, by Congra Software, which owns Hybrid Software, and now we have a new chapter in this story.
The story so far is that Guido van der Schueren, who owns the holding company Congra Software, had proposed to buy all the shares in Global Graphics. Van der Schueren has been chairman of Global Graphics for the last four years and the two companies have worked closely together in this time.
The first plan involved asking shareholders to vote on his offer but this then changed to simply buying the shares from individual shareholders. The aim was to buy 90 percent of the shares, which would have allowed him to squeeze out the remaining 10 percent. It’s also worth noting that there is a significant minority of shareholders that believe the value of the company will go up thanks to its growing inkjet screening technology and that therefore their shares should be worth more than the €4.25 per share price that van der Schueren offered.
The offer period ran from 24 January to 25 February and Global Graphics has since revealed that Congra Software and Guido van der Schueren now hold 5,872,086 shares in Global Graphics, which is roughly 50.09 percent of the voting rights. This includes 1,640,000 shares, or roughly 13.99 percent held by Powergraph BVBA, which is controlled by van der Schueren and his family.
This is far short of the 90 percent target. But Gary Fry, CEO of Global Graphics, says that to all intents and purposes van der Schueren has succeeded in taking over the company, pointing out that he is the majority shareholder, adding: “The intention over time is to acquire more of the shares.”
So, where does this leave Global Graphics now? Fry says: “The plan was and still is that we were never going to integrate Hybrid and Global Graphics. They are two different companies that go after two different markets. Global Graphics talks directly to equipment manufacturers and Hybrid talks directly to the print shops.”
He says that the two companies do work closely at the technical level, noting: “We always had a good relationship. Hybrid uses the Harlequin RIP with its CloudFlow product and we started that four years ago when Guido joined the board and became chairman and a major investor. Since last Drupa we also took a decision to take the Hybrid components of CloudFlow and sell them to OEMs as Fundamentals and both these carry on.” Fry says that the two companies have joint technical discussions and discuss roadmaps, adding: “There are always joint products and we do work on stuff regularly but that’s different to integrating the teams.” This begs the obvious question – why spend a lot of money to acquire Global Graphics if it’s not to integrate the development?
Fry refers to Hybrid Software as a “sister company” and says that the two companies will “lean” on each other, which might include joint stands at tradeshows. He adds: “Hybrid has been getting a very strong brand recognition in areas like labels and packaging so aligning ourselves to the Hybrid brand as a sister company and taking their technology on is a good start for us.”
However, Fry acknowledges that there’s been very little in the way of cross sales between the two companies. He says working with OEMs is a slow process and that he would like to see more cross sales, adding: “Hybrid have been growing the number of RIPs they have been selling and we now have shipping customers with Fundamentals.”
Instead, Global Graphics has had far more success with its inkjet technology, largely helped by having acquired several specialist companies including Meteor Inkjet. A quick read through of Global Graphics’ financial reports shows that this area is a major contributor to the company’s overall profits. And anyone who has read the news on websites such as this one will know that Global Graphics has developed a range of inkjet software solutions as well as its PrintFlat calibration service, which is likely to bring new customers and revenue.
Fry does not believe that van der Schueren will increase his offer for the remaining shares but of course market forces over time may leave him with little option. We’re likely to see a lot of inkjet presses coming to fruition over the next couple of years – both in the graphics and the largely untapped industrial markets – and Global Graphics has some very useful enabling technology that can help those vendors get their presses to market quicker, as well as the proven track record from its Harlequin RIP. So. it will be certainly be interesting to watch the company’s share price over the next couple of years.
Meanwhile, Johan Volckaerts, sold all of his shares to Congra and has subsequently resigned his seat at the board as a non-executive director. He’s been replaced by Clare Findlay, who was previously a non-executive director of the Company from June 2011 until 2014.
The next instalment to this story should come at the end of the month when Global Graphics releases its financial results. Hopefully Guido van der Schueren will also take the opportunity to tell us a little more about his intentions.