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Saratoga Partners Agrees to Sell Sericol Ink Business to Fujifilm

Published on 2005-01-21. Author : SpecialChem

NEW YORK -- Saratoga Partners, the New York-based private-equity investment firm, announced it had signed a definitive agreement to sell Sericol, a leading producer of specialty printing inks, to Fuji Photo Film Co., Ltd, of Japan (Nasdaq: FUJIY - News) in a transaction valued at approximately $230 million.

Saratoga had acquired Sericol in February 2003 from BP subsidiary Burmah Castrol plc. Sericol is a world leader in the production and sale of premium inks and other consumables for screen, narrow web and digital printing and also provides comprehensive technical and advisory services.

Sericol generated revenues of approximately $260 million in 2004, representing a compound rate of growth in the double digits during each of the two years of Saratoga's ownership.

Christian Oberbeck, managing director of Saratoga Partners, said Sericol had been a very good investment for the firm.

"Sericol had a leading market position in screen printing inks when we acquired it," Oberbeck said, "and thanks to a strong and experienced management team, it has expanded its leadership position. We encouraged management to focus aggressively on the expanding market for digital inks, a move that is transforming the company and has made it an attractive strategic acquisition. The company's new relationship with Fujifilm and Fujifilm's global resources and technical expertise will only enhance its prospects for future growth."

Damon Ball, also a Saratoga managing director, noted that Saratoga had worked closely with management to take a number of important steps to improve the company and increase its profitability. These included developing outsourcing initiatives, improved management information systems, changes in distribution strategy and more efficient manufacturing methods.

He added that, with Saratoga's assistance, management had significantly improved Sericol's cash management and financial planning disciplines.

Ball said that Fujifilm planned to operate Sericol as one of the key business units within its printing business and that its current management group, including Chief Executive Ed Carhart, would remain in place. The transaction is expected to close in late February.

Sericol's principal manufacturing plants are in Kansas City, Missouri, and in Broadstairs, England. It also has facilities in Australia, India, China and Brazil. Its products are sold in more than 80 countries, and it has more than 1,200 employees worldwide.

Sericol is owned by Saratoga Partners IV, L.P., Saratoga's fourth investment fund, which closed in 1999 with $250 million in commitments. It will be the second company sold by the fourth fund: In May 2003, it sold Datavantage, a leading provider of point-of-sale systems to specialty retailers, in a transaction that resulted in a fourfold return on its investment. With the proceeds of this transaction, the fund will have returned more than 50 percent of its invested capital.

Saratoga Partners was founded in 1984 as a division of the New York investment firm Dillon, Read & Co., Inc., and since then has invested in 33 companies with an aggregate value of more than $3.7 billion. Saratoga has been independent since 1998.

Besides Sericol, Saratoga's portfolio companies include Koppers, a leading producer of carbon compounds and treated wood products for the railroad and other industries; Advanced Lighting Technologies, a leading manufacturer of metal halide lighting systems, and Emeritus, a nationwide operator of assisted living facilities for seniors.

Saratoga, a middle-market private-equity firm, invests in businesses with strong management teams and leading market positions with valuations of between $50 million and $500 million. It specializes in partnering with management to acquire companies with strong market positions in specialized manufacturing and business service industries.

About Fujifilm

A global company with a reputation for the highest quality and reliability, Fujifilm is a leading provider of imaging, information, and document-related products and services. In the year ending March 31, 2004, it had global revenues of more than $24 billion, and employs 73,164 people worldwide. Its product lines and services include photographic films, digital cameras, lab equipment, photofinishing services, graphic arts, medical imaging, recording media, LCD materials, digital color multifunction printers, document managing solutions and services.

Source: Saratoga Partners


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