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Agfa's Purchase of Gandinnovations

Jeti Printers Then and Now

By Kim Crowley

The large format industry endured daunting economic conditions over the past 18 to 24 months. Many firms did more with less to combat economic pressures. Some dealt with internal financial upheaval. Gandinnovations—a printer manufacturer with what seemed to be upward momentum—is one firm whose financial problems ultimately led to insolvency and acquisition.

On May 8, 2009 Gandinnovations filed an initial order for financial protection in the ON, Canada Supreme Court, hoping to reorganize the company and return to profitability, while putting accrued debts on hold. Almost a year later, Agfa-Gevaert purchased the assets of Gandinnovations. A court-appointed monitor concluded that a sale of the assets was the best path forward.

Business Evolution
Brothers James and Hary Gandy begin a career in specialty imaging with their father in 1978. The company, Signtech, produced aluminum frames and flexible material.

A failed public entry into the Toronto, ON stock exchange in 1986 was followed by a union strike. This lead to reorganization and the opening of Signtech USA in TX in 1989.

To succeed in the business of selling output, the Gandys invented proprietary equipment as they grew. In the early 1990s, they entered the print equipment business, making investments in VUTEk—now owned by EFI—and the development of the company’s first airbrush machine. Signtech is the international distributor of the product.

Signtech launched its own printer—the Salsa—in 1996. Four years later they sold the material business to Arlon, Inc., then merged Salsa Digital with Nur—a brand now owned by Hewlett-Packard.

Soon after, the Gandy brothers decided to return to their own business, launching Gandinnovations, in Toronto, ON. In less than ten years, the Gandinnovations name became prominent among leading manufacturers of UV flatbeds, roll-to-roll printers, solvent printers, and dye-sublimation (dye-sub) printers.

Innovations
According to Hary Gandy, “Gandinnovations focused on corporate objectives to create the fastest and most reliable printers capable of the highest quality output.” The company met these goals with a strong lineup of innovative machines.

Gandinnovations launched the Jeti 3300 roll-to-roll solvent printer in 2002. The following year marked the release of a six-color Jeti 5000 with 50 percent more spectra printheads. Today over 1,100 Jeti printers are placed in shops worldwide.

In 2004, Gandinnovations showcased its Jeti 3150 UV flatbed at drupa in Germany, and introduced a new dye-sub process the same year. The next year, the Jeti 3318 grand format printer and a high-definition backlit camera for precise front and back registration were introduced.

The company hit a milestone with the sale of its 500 Jeti printer in 2006. The same year, the company introduced its six-color Jeti 3324 UV roll-to-roll printer with true 600 dpi resolution.

In 2007, Gandinnovations captured the attention of textile printers with the direct-to-fabric Jeti 3324 AquaJet, a three-meter dye-sub printer that uses water-based inks on polyester fabrics.

The Jeti 3150 X-2 UV flatbed also advanced in 2007, becoming the best selling Jeti flatbed printer. It features a five- by ten-foot print area and uses 48 spectra printheads to produce high-quality graphics.

At drupa 2008, Gandinnovations unveiled the Jeti3348 JetSpeed UV RTR and the Nanojet UV true flatbed grand format printer with 24 spectra printheads. At SGIA and Graph Expo, the same year, the company showcased the new GandiSoft RIP software program.

Gandinnovations offered robotic technology to users of Jeti flatbed digital printers in February 2009, with a high-speed automatic loading robot, referred to as High-Speed Auto Loader (H.A.L.). With H.A.L. customers accurately perform multiple rolls on two machines simultaneously.

In September 2009, Gandinnovations unveiled a Flat-to-Roll (FTR) feature for the 1224 series Jeti flatbed printers. The FTR option is fitted onto the front and back of the flatbed printer while in production and performs similar to a hybrid.

Industry Praise
Gandinnovations continued to make its presence known at industry gatherings, despite financial woes.

The company wowed at the October 2008 SGIA Expo, where they were a platinum sponsor. Awards included Grand Format Solvent Ink DPI Product of the Year for the Jeti 3324 Solvent RTR; Textile DPI Product of the Year for the Jeti 3324 AquaJet; and Partner Awards in both categories.

Carl Baldwin, chairman, SGIA, presented James Gandy with the 2008 DPI Innovator Award at the expo. The award recognizes innovative industry leaders advancing the digital imaging community.

More recent industry trade shows also proved successful for Gandinnovations. The company reported that it sold nearly 75 of its printers at the May 2009 ISA International Sign Expo in Las Vegas, NV.

Troubled Partnership
In 2007, Gandinnovations sought funding from private equity firm TA Associates to help expand business. “Our intention was to keep control,” explains Gandy. “This was our business. We had them invest not because we wanted to cash out; we wanted to expand.”

Between 2008 and 2009, according to Gandy, business crashed. “We didn’t know that there would be a 40 to 50 percent drop. The superwide format business was dramatically affected by the economy—not just in the U.S., but worldwide,” he says.

Economic expectations led to a troubled partnership with TA Associates. The equity firm tried to recoup its investment by attempting to put a receiver in to take over Gandinnovations. Since they did not hold a majority stake, they failed.

In May 2009 Gandinnovations filed for protection in the ON Supreme Court, citing a need to reorganize the company and return to profitability. The court issued an Initial Order under the Companies’ Creditors Arrangement Act (CCAA) allowing Gandinnovations to restructure its affairs under a court-supervised process. CCAA took over management and financial disposition of the company.

New Leadership
Ultimately, redemption was found in the hands of Belgium-based Agfa Graphics. The Agfa Graphics business group announced in November 2009 that it would acquire Gandinnovations. On January 15, 2010 Agfa finalized the venture, acquiring the assets of Gandi Innovations Holdings LLC’s North American operations and shares of its principal foreign subsidiaries.

Agfa’s company perspective on the new investment is described by Deborah Hutcheson, director of marketing, Agfa. “Agfa made a strategic change with the size and depth of our inkjet business. We significantly expanded and strengthened our wide format portfolio with the Jeti printers. They are 100 percent complementary to Agfa’s current inkjet product range. With the combined technological expertise and resources we have solutions to meet the business needs of consumers,” she says.

Agfa showcased the rebranded :Jeti Aquajet direct-to-fabric printer, along with the Agfa :Anapurna M2 and :Anapurna Mw inkjet printers at the 2010 ISA International Sign Expo in Orlando, FL. The show was the public’s first introduction to Agfa’s newly expanded portfolio.

Legal Standing
BDO Canada Limited, the monitor of Gandinnovations under CCAA since May 8, 2009, maintains court documents on their extranet according to the order of events. The documents follow Gandinnovations from CCAA filing through their purchase by Agfa. Court documents include the initial CCAA order from May 2009; sale process approval order on June 26, 2009; and distribution order of Justice Morawetz of the ON Superior Court of Justice on January 28, 2010.

On January 29, 2010 BDO posted an update on the legal matters. BDO intends to administer a claims bar process where a distribution will be made to unsecured creditors. Creditors will be notified of the procedures associated with filing claims through the monitor.

The funds available to unsecured creditors are contingent upon future accounts receivable collection by Agfa. As a result, distributions to the unsecured creditors are likely to be in installments over the next six to 18 months, the January 2010 document states. A preliminary estimate of the total distribution to unsecured creditors over that time is in the range of 20 to 30 cents on the dollar of each unsecured claim.

May2010, Digital Output

 
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