The Deal

On June 8^th Fujifilm announced that it has signed an agreement to acquire Unigraphica AG. Unigraphica AG is a system integrator operating for over 37 years, based in Liechtenstein with expertise in providing customised inkjet printing systems. The company will become a wholly owned subsidiary of Fujifilm and will be named FUJIFILM UNIGRAPHICA AG from July 1^st.

Organisationally Unigraphica will report to Fujifilm Integrated Inkjet Solution (FIIS). The acquisition brings an expansion of the FIIS business in Europe, which works across various industries to supply solutions for high-volume production processes through integrated inkjet printing systems. Fujifilm’s inkjet system technologies and products together will be combined with Unigraphica’s experience and integration capabilities.

In the foreseeable future there will be no drastic changes in how Unigraphica operates. Markets and devices will continue to be served and the former management remains on board.

Who is Unigraphica AG

Unigraphica AG has a long history in supplying the Graphic Arts industry. The company is based in the tiny country of Liechtenstein in the middle of Europe and was established in 1985. The company started out as a provider of bespoke finishing solutions, mostly for narrow web. Expertise was in handling multiple webs for complex finishing processes. Unigraphica mainly provides design and engineering, while the manufacturing of the lines was taken care of by manufacturing partners nearby. It also has a small business unit focussed on trading 2^nd hand graphic arts equipment.

Today Unigraphica is a business with 12 employees and the focus shifted towards bespoke inkjet solutions, made to order according to the customer requirements. They can include feeding, transport, inkjet units, drying and finishing. Pure finishing solutions are offered still but took a second seat. Unigraphica is especially strong in security printing solutions but is serving other markets as well. Various types of substrate transports are offered and in the past inkjet heads from different vendors were used.

According to their website, Unigraphica had 1,605 projects completed and 882 customers worldwide. Yet most customers are based in Europe.

What Matters

FIIS has been around for 15 years. It is part of the Fujifilm Inkjet Business Division, like for  example the inks business and Fujifilm Dimatix, the provider of Samba and Starfire inkjet print heads. Fujifilm Dimatix does supply heads to Fujifilm’s own inkjet products as well as to other equipment manufacturers and inkjet integrators. Heads are sold to manufacturers as well that compete, at least to some extent, against Fujifilm’s own inkjet presses, but not to end users.

In contrast to the Fujifilm Dimatix business, FIIS business is to provide a wide range of highly configurable single-pass inkjet systems, also to end customers. They can be out-of-the-box inkjet assemblies, custom integrateable print bar systems or custom print lines. This includes production-ready multi-colour print systems fully integrated into production processes. Main markets today are direct mail and transaction in commercial print and working with brand owners and packaging printers. In the case of the latter, inkjet can be integrated in stand-alone units, converting lines or filling lines at brand owners’ sites.

FIIS only started a few years ago to markets its services more actively and has seen revenue growing rapidly. Unigraphica provides FIIS with two assets: a broader European presence and know-how in the peripheral functions that support printing like transports and finishing. The former should increase opportunities for print bar sales in Europe as inkjet print bars are a more standardized business but still need local sales and support. The latter is probably more interesting as it allows FFIIS branching out into more areas. Unigraphica has the expertise in setting up custom made lines for specialty applications - where off-the-shelf systems from large vendors are not a good match. Especially the know-how in security printing lines can be leveraged by FIIS around the globe, although among all possible inkjet markets this is a small niche. The acquisition does not only open the door for print system sales, it also means more business for Fujifilm’s ink manufacturing – inks the future systems are most likely to use.

Fujifilm can help Unigraphica in becoming more efficient as well, by helping the company to become better in standardising, modularity and scaling of operations – plus giving them direct access to the latest inkjet and ink technology.

Unigraphica was and the new FIIS will be serving markets large OEMs (including current Dimatix inkjet print head customers) are not able to serve. There is some competition however to a host of other inkjet integrators like: DJM, Cadis or Neos, which could be using Dimatix inkjet heads as well and might develop a more cautious approach now.

In the end the most important question is how Fujifilm wants to scale the new business. In the financial year 2021 (ending March 22) Fujifilm had revenues of ¥ 2,525.8 billion (about US$ 21 bn), an increase of 15.2% over FY 2020. The graphic communication segment achieved a revenue of ¥289.4 billion in FY 2021. Acquiring a company with 12 employees will have no significant immediate impact on revenues.

However, singled out as a strategic growth area, more growth on the Unigraphica site is expected. Getting critical scale from a remote location in a (very) high labour cost country is challenging, however. It will be interesting to see if and how the know-how of Unigraphica can be leveraged for more growth initiatives. So far, the market for bespoke inkjet solutions is quite fragmented with most companies having revenues below $25 million. Remaining small keeps the companies nimble and focussed on customers and local markets. Yet the market is growing quickly as do the application areas for inkjet. With intelligent modularity and some scale in operations (expertise in electronics, workflow, inks, sensors, …) a larger competitor could bring interesting capabilities to the market as well. Success will depend on how much Fujifilm is willing to invest in scaling operations (including more sales & marketing) and how all business and know-how centres within Fujifilm Graphic Communication can be leveraged.