Benpac Holding AG is a Swiss company based in Stans in the canton of Nidwalden. Switzerland consists of 26 cantons that, and regardless of Switzerland's relatively small size, these are federal states, like we know them from Germany, the US, and other countries. Switzerland is among the world's most beautiful countries with borders to Germany, France, Italy, and Austria, and with dividing mountains, the country has different cultures and languages. The 8.5 million people are known for their accuracy, watches, chocolate, chemical industries, banks, international organizations like the Red Cross, and in the printing industry, companies like Hunkeler AG and Bobst AG.
A few weeks ago, a 'new' company appeared on the radar. Ten times the number of employees of Hunkeler and just a few thousand less than Bobst, Benpac entered the global printing stage acquiring Gallus for a staggering 120 million euros or EBITDA x 15.
Before the Gallus deal was announced, I must admit I'd never heard of Benpac Holding, nor about the owner Marco Corvi, so that kickstarted my curiosity to find out more - and that was not as easy as it usually is.
Benpac Holding AG is, according to CEO Marco Corvi, a privately owned company, but they claim to be a public company on their LinkedIn profile - it isn't, however. Benpac Holding and all the companies I will refer to in this article are privately owned.
Opencorporates, websites, company registers, google, newspapers, and other media, mostly gives you a comprehensive overview of a company, the owners, and it's activities. Still, with Benpac Holding AG and Marco Corvi, it has been complicated to find information. During my research, one of the people I spoke with said that Swiss people and companies prefer to 'fly low,' and this is for sure the case with Marco Corvi. So let's start where we can.
Though acquisitions take place all the time, it's not always a walk in the park. Buying and selling companies take time and are surrounded by secrecy. The seller wants to be sure to get the best possible price, and the buyer obviously has no interest in pushing the price up. Still, the selling of divisions or entire companies can influence stock prices, employees, and many more things, so selling a company is often done very quietly. For publicly-traded companies, there are also rules and regulations about when things can be said. When rumors get to market share prices often rise, shareholders speculate making the most money of their investment.
Sometimes, however, companies publicly announce their intentions to sell divisions or companies. If a company has announced a new strategy where a business division doesn't fit the company, selling is one option. Publicly announcing an interest in selling a company is an invitation to the market to consider buying. So the process before getting into discussions about price and terms is a delicate matter. In the case with Heidelberg, we have no idea about who and how the deal was initiated. However, I believe Benpac has taken the initiative. First of all, Benpac is not a very well-known player in the market, and secondly, they have no publicly known interest in the business that Gallus serve - until now. When former Heidelberg Head of Technology, Stephan Plenz, joined the Benpac Holding AG board on July 3rd, it was maybe the first direct connection between Gallus, Heidelberg, and Benpac - at least in public.
Heidelberg is even quoted for their focus on label and packaging as late as July 8th in "Digital Labels & Packaging" and other media. So from that perspective, the sale of Gallus wasn't exactly anticipated when it was announced July 22nd.
With Heidelberg's need for money and Marcus Wassenberg's focus on strengthening Heidelberg, they could be intrigued by a proposal from Benpac. For Benpac, maybe a golden opportunity?
When Stephan Plenz "after common agreement" with Heidelberg stepped down from the management board and left Heidelberg after 19 years, this was one of the bigger surprises to many. I interviewed Stephan Plenz at drupa 2016, and I can't help thinking about how difficult it must be to leave a company after so many years. Your identity and your DNA becomes in sync with the company you are part of.
Normally I would expect negotiations to acquire a company like Gallus would take time. Valuation, due-diligence, terms, financing - all these things take time. As already mentioned, Heidelberg has kept stating their focus on label and packaging, so when did the negotiations start?
I wrote to BakerMcKenzie, the counseling partner for Marco Corvi, on the Gallus deal - and of course, they didn't want to reveal anything. The Gallus acquisition, I believe, has been negotiated over a very short time. From a Heidelberg perspective, I am sure they would prefer to have a deal recorded in the 2019/2020 books, which weren't possible. And since Heidelberg, during the first half-year on several occasions, confirmed the dedication to Gallus, Labelfire, and labels in general - the negotiations could have started after the announcement of the results for 2019/2020. Speculations, yes, but likely I believe.
It is only a year ago that the Benpac acquisitions started to get up in gear. With companies like PackSys Global (Thailand) - and others, it's interesting to understand the time perspective. Is the takeover part of a masterplan, and if so, what is that plan? Benpac Packaging in Thailand produces machines for print on tubes, so no direct synergy with Gallus - or what do you think?
Regardless the acquisition requires money!
As part of Benpacs storytelling, Marco Corvi has told that Benpac has 3.150 employees. In the printing industry, this is a big company. For comparison, Esko has 1.800 employees, and Koenig & Bauer 6.500, so having so many employees and so little presence in public is extremely unusual.
Benpac's websites have close to no information, and it's almost impossible to find out what they do. In an interview with the Swiss Newspaper Luzerner Zeitung from July 2019, he is quoted saying (translated from German), "We produce machine systems for filling and packaging technology, including the individual parts and assemblies. Customers are filling companies for food, beverages, cosmetics, spirits, and the pharmaceutical industry..... Such as Novartis, Rheinsalinen, Assa Abloy, Alucon, and many more."
With these impressive references and exciting products, it's strange that these products and services can't be found on the internet - like - not at all! The only products you can see are the products from the previous PackSys Global (Thailand) company - now Benpac Packaging Ltd.
In several interviews in Swiss local newspapers, Marco Corvi has taken on the role of saving various companies from closing (locally). Grenacher (8 employees), Müller Martini (60 employees), Berghoff (71 employees), Rohrer AG (30 employees), and Gallus (6 employees) are among the companies that Marco Corvi has taken over - or at least obligations and employees. The Müller Martini building and employees at the site in Stans were acquired in 2019, almost at the same time as PackSys Global in Thailand. In an interview, Corvi explains that some of the production from Thailand will be moved to Switzerland.
In the same interview, Marco Corvi is asked, "There are rumors that there are various debt enforcement proceedings against you?"
Whereto Marco Corvi responds (also translated from German): "Rumors are always spread by someone who has a specific purpose in doing so. There are indeed individual procedures, but the amounts involved are not large. Some of the claims are unjustified and disputed, and some are related to the private sphere. But none of this has any connection with the takeover of the production facility in Stans."
For a company the acclaimed size of Benpac, it's also unusual to come forward on such speculations - especially since Corvi claims to have revenue and profit that can pay Heidelberg in full, in cash.
PackSys changed their name to Benpac Packaging ltd., and continue to produce printing machines for print on tubes. The financial result for Benpac Packaging ltd. is, however, not impressive. According to numbers acquired from Dun & Bradstreet, the result for the first year was a loss of 78.000.000 Baht close to 2.1 mill euro. This is, by the way, the ONLY of the Benpac companies we have been able to get numbers on.
Benpac is a complex group of companies - in the US, Marco Corvi controls min. five companies - Benpac- Holding, Industrial Real Estate, Systems, Technology, and Trading - and though Marco Corvi in articles have explained that his company has activities in the US, it isn't easy to find any employees at any of his entities. Most of the addresses are located in the Empire State Building at the German-American trade-organization. In Switzerland, Corvi controls even more companies - and to mention the ones that are under the "Benpac-" name are: Holding, Consult, Engineering, Fertigungs, Financial Services, Grenacher, Informatik, Innovation, IT Solutions, and Maschinenbau. In Switzerland, neither of the companies have websites (except www.benpac.com). None of the companies have registered more than 0-4 employees, so how Marco Corvi comes to the 3.000+ employees is a mystery.
Some of the company names have similarities but are not the same. Benpac Packaging AG is not the same as Benpac Packaging ltd., and Benpac Holding AG is not the same company as Benpac Holding Inc.
I have, during my research, spoken with several people who used to work for Benpac - and even employees have difficulties understanding the underlying business - and even more the number of claimed employes.
You may ask why I believe the above information is important? And well, it's the underlying structures that are difficult to understand, and therefore makes me ask - why? The more complex an organization is, the more I want to understand the reasons why.
Regardless of the economy apparently not present with Marco Corvi and the companies he owns, Marco Corvi must have given Heidelberg securities for the payment. According to an article in Packaging South Asia and later confirmed by sources at Heidelberg, the deal is a cash-deal.
One CFO told me, "strategic deals with the right business plan will always get funding. Money is still available in the market if you can show the potential of a transaction and demonstrate the synergies."
Before a deal is signed, the buyer should deliver a payment guarantee. For now, it's not possible to say anything about how the acquisition has been guaranteed. We have looked into credit ratings and reports of most of the Benpac companies, and none of these indicates Benpacs ability to raise 120 million euros. The deal is, therefore, most likely secured by a third-party.
Looking at the deal itself is also interesting. In Heidelberg's books, equity accounts for 106 million euros and net results for 2019/2020 in the range of 8 million euros. But what is Corvi buying?
Some companies, some production, some products, and, of course, assets, production equipment, etc. What about digital? The Labelfire is based on Samba heads technology from Fujifilm. Here is what Heidelberg CEO Rainer hundsdörfer said about the deal "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."
Since Heidelberg will continue selling and servicing the Gallus range of products, why is the price tag then 120 million euros? With an EBITDA of 8 million euros, the price could have been anticipated considerably lower?
In the same press-release, Marco Corvi says, "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."
What companies? And what synergies?
After now researching for almost three weeks, I am not convinced. Marco Corvi has some visions that he believes can be carried through with acquisitions of some smaller entities in Switzerland, combined with his filling and packaging machines (don't ask where to find info about these), combined with his acquisition in Thailand, and now with Gallus.
There is NO evidence on the internet that the companies owned by Marco Corvi deliver anything at all. There is no evidence that he has revenue and profit that can pay for the companies he acquires. There is no evidence that he has more than 3.000 employees, and there is nothing that indicates that he has a business that can deliver that value he is claiming. I have researched thoroughly - and yes - Switzerland doesn't offer open books, so the only thing I can relate to is the official credit reports that you can buy. But with less than 50 employees on LinkedIn and eight on Xing - it's so strange.
I have asked Marco Corvi to participate in an Over the Skype interview, which he hasn't responded to yet. You can ask whether it's OK to judge Benpac based on the research I have done. I have information that I can't reveal since I have promised people privacy, interviewed for background, and therefore can't disclose some of the information that could substantiate some of the conclusions.
Marco Corvi and Benpac is a complex company - and for no reason. Companies have changed names since they were established. Some companies owned by Marco Corvi has filed for bankruptcy - but many years ago - and that information is publicly available.
If Marco Corvi, at some point, would like to explain more about his business, he is more than welcome.
The questions I would like to understand is: