X-Rite to Diversify Through Purchase of Pantone
For fiscal 2007 ended June 30, Pantone had sales of $45 million and adjusted EBITDA of approximately $13 million. Licensing accounts for about 15% of revenues. X-Rite stated that the acquisition will diversify its product range, enhance its recurring revenue stream and accelerate its technology and business models. X-Rite can also increase distribution of Pantone product, leverage the Pantone brand name and exploit economies of scale.
Grand Rapids, MI 8/23/07—X-Rite, a maker of color spectrophotometers and colorimeters, has agreed to acquire Pantone for $180 million. Pantone provides products for color identification, matching and reproduction, including color matching systems and standards. In 2006, Pantone recorded revenues of $42 million and adjusted EBITDA of approximately 27% of revenues. X-Rite expects the transaction to be accretive to cash EPS in the second year of combined operations and to achieve $6.5 million in operating cost savings from the transaction in the second year. “This iconic brand is the perfect complement to X-Rite’s business, bringing Pantone’s expertise and market position in color communication and standards to our color solutions product offerings,” commented X-Rite CEO Tom Vacchiano. Pantone will become a business unit of X-Rite. The transaction is expected to close in the fall.
