X-Rite to Buy Color Specialist Pantone
Thursday August 23, 5:39 pm ET
X-Rite to Acquire Color Matching Firm Pantone for $180 Million
GRAND RAPIDS, Mich. (AP) -- X-Rite Inc., which makes tools to measure fabric, paint and plastic colors, said Thursday it agreed to purchase privately held color reproduction specialist Pantone Inc. for $180 million.
The deal is expected to close in the fall of 2007.
Carlstadt, N.J.-based Pantone sells its system for identifying and matching colors in over 100 countries in the graphic arts, fashion, home, interior, plastics, architectural, paint, industrial design and consumer markets. The company generated revenue of about $42 million in 2006.
X-Rite expects the acquisition to add to cash earnings per share in the second year of combined operations, and sees cost savings of about $6.5 million by that same time. During the first year, the company expects to incur cash restructuring costs of about $5.5 million.
X-Rite said Pantone will become a new business unit within the company, with current Pantone leaders continuing to play key roles in the organization.
The transaction will be funded with cash, financed through new borrowings. Merrill Lynch, Fifth Third Bank, National City Bank, LaSalle Bank and GoldenTree Asset Management LP have committed to a total debt package of up to $415 million to fund the transaction and refinance X-Rite's existing debt.
X-Rite reported sales of $179.8 million for fiscal 2006. Shares fell 25 cents to close earlier at $14.53.
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