Heidelberger Druckmaschinen AG (Heidelberg) has announced it is systematically pursuing the company’s realignment. Having decided to focus on its core business of sheetfed printing, Heidelberg is selling the Gallus Group to the Swiss packaging business benpac holding ag in Stans.

The decision has been made due to the challenging situation created by COVID-19.

In the future, Heidelberg and benpac will work together closely on the Gallus Labelfire digital label press. Heidelberg will continue supplying the digital printing unit (DPU) and consumables for this press.

“We are selling our narrow-web rotary and rotary flexographic printing activities to focus more closely on innovative solutions for the entire printed sheet value chain. We will be retaining our in-house digital expertise and, by collaborating with benpac on the Gallus Labelfire, we will also be making further progress with the digitization of conventional presses. At the same time, we will remain a major supplier on the growing label market with our sheetfed offset presses,” says Heidelberg CEO Rainer Hundsdörfer.

The transaction will see benpac assume ownership of Gallus Holding AG in St. Gallen, Gallus Ferd. Rüesch AG 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 – five sites with a total of some 430 employees in Germany and Switzerland.

With an agreed purchase price of some 120 million euros, Heidelberg is expecting the deal to generate earnings in the mid two-digit million-euro range. The parameters will be finalized at the time of closing. The sale, which still needs to be approved by the relevant bodies and is subject to other condition precedents, is set to take effect before the end of 2020.

“Our aim is to ensure the long-term financial stability of Heidelberg and all the measures since our transformation started in March this year have been geared toward this objective. Selling the Gallus Group is another key part of our realignment and follows on from the successes we have achieved so far during the transformation process. This further major boost to our liquidity and Group equity will be a big help, especially during the coronavirus crisis,” underlines Heidelberg CFO Marcus A. Wassenberg.

Gallus customers will continue to benefit from the proven quality and reliability of the company’s global network.

“The acquisition of the Gallus Group is of great strategic importance for benpac holding ag. It completes our overall range in the packaging sector and ensures that the entire value chain is covered. The expertise of the Gallus Group will contribute to the further development of our group of companies,” says Marco Corvi, CEO and chairman of the Board of Directors of benpac holding ag.

For more on a recent Gallus success story with Hub Labels, click here.