Micro Inks to acquire Hostmann Steinberg USA

Micro Inks approved acquisition of 100% equity capital and preferred stocks in Hostmann Steinberg USA (HST) from MHM Holding GmbH, Germany, a holding Company of the Company for a total consideration of US $ 4 million, through Micro Inks GmbH, Austria, a wholly owned subsidiary of the Company, effective January 01, 2007. The Company will provide necessary funding for the above acquisition by investing an amount not exceeding US $4.05 million by way of equity in its wholly owned subsidiary Micro Inks GmbH, Austria.

HST is situated in the state of Georgia in the USA. It is engaged in the manifesting and marketing of high quality printing inks products with focus on litho printing inks for commercial and packaging applications in Sheetfed and Web Heatset inks.

HST sales and net profit are estimated at US $29.6 million and US $0.58 million, respectively for the year ended December 31, 2006. HST has a large customer base for Sheetfed Inks and a network of branch locations in USA.

Micro Inks Corporation, USA has a sales turnover of US $71 million for the nine months period ended December 31, 2007.

After the aforesaid acquisition Micro Inks GmbH, Austria will own 100% of Micro Inks Corporation, USA and Hostmann-Steinberg, USA

The Board, at its meeting held on January 31, 2007, also consented, subject to receipt of all approvals required for merger of HST USA and Micro Inks Corporation USA, as a single legal entity and will be named 'Hostmann Steinberg, USA'. The merger will be effective only after receipt of a relevant approvals.

This acquisition and merger is expected to:

- Consolidate printing inks business of USA under one unified management structure and common brand which will lead to better price negotiation, deeper market penetration and customer service.

- Manufacturing base of Micro Inks Corporation will be leveraged to cater the NAFTA region.

- Result in higher capacity utilization.

- All requirements of Intermediates and Printing Inks will be serviced from the Company.

- Rationalisation of fixed & operating costs.

Source : Equity Bulls

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