Gallus sale falls through

The sale of Gallus that Heidelberg announced last summer has fallen through – which I can tell you has not come as any surprise to those of us that have been following this story.

The Gallus LabelMaster Advanced narrow web flexo press

Readers may recall that back in July 2020 Heidelberg announced it had sold Gallus to the Swiss company Benpac Holding for €120 million subject to the usual regulatory checks. The acquisition was cleared by the German Federal Cartel Office on 23 December 2020 and should have closed by the end of the year.

However, Benpac was unable to complete the deal before the end of 2020 so it was postponed till the end of January 2021, with Heidelberg stating at the time: “The owner of the purchaser, Mr Marco Corvi, has issued personal notarized acknowledgements of debt to Heidelberg in the amount of the total outstanding purchase price of €120 million to secure payment of the purchase price.”

Now Heidelberg says that Benpac Holding failed to pay this money last  Friday, 29 January 2021, which was the final deadline. Consequently the deal is off and Gallus remains part of the Heidelberg group. 

This deal was riddled with problems from the very start as I noted in my original report. To recap, for the €120 million, Benpac Holding would gain control of the five Gallus sites, comprising Gallus Holding AG in St. Gallen, Gallus Ferd. Rüesch AG, also in St. Gallen, Gallus Druckmaschinen GmbH in Langgöns, Heidelberg Web Carton Converting GmbH (WCC) in Weiden in der Oberpfalz, and Menschick Trockensysteme GmbH in Renningen, plus responsibility for the 430 employees in working at these sites in Germany and Switzerland.

So far so good, but from hereon everything about this deal just goes off the rails. For a start, there is very little information on Benpac Holding. This company is made up of 32 companies and is completely owned by a swiss entrepreneur, Marco Corvi, who told me that the company was “100 percent self-financed.”

He added: “The acquisition was settled in cash. No bank financing was necessary. The amount was paid from the generated funds. The benpac-Group with its 32 companies and 3,150 employees generates an annual turnover of approximately CHF 720 million and is profitable.”

However, Benpac Holdings remains a mystery with very little real information available. The company claims to have 3,150 employees, which would make it a major business but there’s no real information on its website as to what the company actually does, other than some vague statements – if anything the website looks like it’s been thrown together by a student in their afternoon off. There’s no lists of products or case studies of happy customers, no news or corporate blogs, or anything that suggests an active sales department – absolutely nothing that suggests over 3000 people working for a company with a turnover of CHF 750 million. The most visible part of the group is Benpac Packaging in Thailand, which Benpac acquired from PackSys, and which makes machinery for printing on tubes for packaging applications such as toothpaste or cosmetics. 

Benpac’s interest in Gallus seems to go back to the end of 2019. The local Swiss newspaper Tagblatt carried a story in December 2019 detailing how Benpac Maschinenbau AG took on 40 employees and eight apprentices from the Gallus plant in St Gallen that would otherwise have been made redundant. The newspaper quotes Marco Corvi, CEO and Chairman of the Board of Directors of Benpac Holding AG, saying that the plan was to initially take over Gallus’ highly trained employees and then install its own machines. According to Tagblatt, Corvi said then that he had secured a right of first refusal on the company premises.

Corvi later told me: “We took over Gallus’ assembly activities in January. As part of these negotiations, we have extended the talks to include the acquisition of the entire Gallus Group. The talks began in February.”

Under the terms of the sale, Heidelberg would have continued to manage the sales and service of the Gallus machinery though there were no details as to how that would have worked. Neither side seemed too sure who would own the intellectual property, or who would be responsible for future R&D. It’s not clear that Gallus was really worth €120 million, or how Benpac would have made any profit whilst relying on Heidelberg to manufacture and sell the presses. 

Corvi also told me: “Benpac has its own sales and service structure and can bring the business into it. For the most part, we will handle sales and service business through our own structure, but in some countries we will work together with Heidelberg.”

He added: “It is planned that Heidelberg will continue to supply the digital print unit, including the printing accessories. Gallus will be responsible for building and servicing the machines. We have not made any contact with Fuji.” 

I asked Corvi for his reaction to Heidelberg’s announcement that he had missed the final payment deadline and he replied: “At this point in time we are not commenting on our decision against the acquisition”. 

I reached out to Ferdinand Rüesch last summer as the former owner of Gallus and still the second biggest shareholder in Heidelberg, and asked him a number of questions, including if he thought that this deal represented the best option for Gallus’ customers but he simply referred me to Heidelberg’s PR – hardly a resounding vote of confidence in this arrangement. 

Rainer Hundsdorfer, CEO of Heidelberg.

This leads to the obvious question, how did Heidelberg come to the conclusion that Benpac Holding would be the best company to sell Gallus to? What efforts did Heidelberg make to check if Benpac really could finance this acquisition? Did Heidelberg make any effort to see if any other company was interested in acquiring Gallus? Did Heidelberg not have some responsibility to its shareholders to see if it could get a better price for Gallus? Where does this leave Gallus now? Does Heidelberg still intend to sell Gallus?

It should be remembered that Heidelberg only has two members of its management board – CEO Rainer Hundsdörfer and CFO Marcus Wassenberg – which hardly constitutes strong boardroom oversight and would be an issue for many smaller companies, let alone a business the size of Heidelberg. 

Heidelberg’s stock price had been down to €0.51 in November 2020, rising steadily to average around €0.88 for the first half of January 2021, when it rose spectacularly to €1.31. This was mainly driven by success with the Wallbox, Heidelberg’s unit for recharging electric cars.

Heidelberg says that it had to assume up until the very last minute that the Gallus sale would happen, which conveniently meant that the company was able to slip out the announcement that the deal had collapsed last thing on a Friday night, after the German stock market had closed for the weekend. Not surprisingly, Heidelberg’s stock price has slipped this morning, down to €1.24 at time of writing, though we won’t get a fuller picture till the end of the day, and perhaps not until the end of the week, such is the fickleness of relying on share prices as a guide to a company’s overall wellbeing. 

It’s also too early to draw any conclusions as to how this will affect Heidelberg, especially given the volatile state that all markets are currently experiencing due to the effects of the Covid-19 pandemic. We’ll get a better idea later this month when Heidelberg releases its latest financial figures. 

In the meantime, readers can find some further information on In addition, Morten Reitoft, editor of has written a series of articles on Benpac Holdings.

…with a little help from my friends

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