Pantone US$180m Acquisition Completion For X-Rite

X-Rite has completed the acquisition of Pantone at a price of US$180 million in a deal that was funded exclusively with cash, financed through new borrowings.

Pantone generated revenues of approximately US$42 million in 2006 with adjusted earnings before interest, taxes, depreciation and amortisation of approximately 27 per cent of revenues.

Pantone will become a new business unit within X-Rite.

Current Pantone leaders will continue to play key roles in the organisation, said X-Rite This transaction and refinancing of X-Rite's existing debt was financed through a new debt package totalling US$415 million.

X-Rite said that it anticipated strategic, operational and financial benefits of the acquisition include a deepening of X-Rite's product range by adding colour standards alongside its hardware, software and services.

It also expects to exploit the company's global presence and distribution capabilities to expand the reach of Pantone's colour products.

At the same time, X-Rite said it expects to enhance its revenue generating opportunities and further diversify its revenue base, whilst accelerating technology and business model innovation and achieving synergy in marketing, operations and administration.

The transaction is expected to be accretive to X-Rite's cash earnings per share during year two of the combined operations.

X-Rite expects to achieve approximately US$6.5 million of annual operating expense cost savings associated with the transaction.

During the first year, the company expects to incur cash restructuring costs of approximately US$5.5 million.

Tom Vacchiano, X-Rite's chief executive officer, said: "We expect the combination of our two businesses to further strengthen X-Rite's position as the market's leading and most comprehensive colour management systems provider.

The grouping of our broad technology and standards and an expanded customer base should help us further several of our strategic objectives, including driving innovation and growth and further diversifying our business.".

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