Heidelberg has sold its Hi-Tech Coatings division for coatings used by the packaging, labelling, and printing industries to Innovative Chemical Products Group’s (ICP Group) Industrial Solutions Group (ISG) division.

The purchase price amounts to €38.5 million, with Heidelberg expecting the transaction to generate non-recurring income of around €20 million.

ISG is a global provider of packaging, labelling, and specialty clear coatings based in Itasca, US, while Hi-Tech Coatings develops and produces over 1,000 environmentally compatible products and formulations, primarily water-based and UV-based coatings.

With the sale, three of its sites in the UK, Netherlands and US, as well as around 60 employees will be transferred to ICP’s ISG division.

According to Heidelberg, the divestiture is a part of its initiative to focus on core activities and portfolio adjustments.

“The transaction also established a strategic partnership between Heidelberg and ICP Group to ensure Heidelberg’s future sales of its coating portfolio to its customers. The final terms will be determined at the time of closing. Subject to customary closing conditions, the sale is expected to be effective in 2019,” the company said, in a statement.

According to Heidelberg CEO Rainer Hundsdörfer, the company decided to withdraw from its production of packaging and printing coatings following a portfolio analysis.

“We will use the funds released as a result to push ahead with strategic investments for the future on the path to our digital transformation,” he said.

ICP Group CEO Doug Mattscheck said the company is excited to welcome the employees of Hi-Tech Coatings to the ICP family and to enter into this long-term, strategic partnership with Heidelberg.

“We’re looking forward to providing Heidelberg and Hi-Tech Coatings’ customers with exceptional service, an expanded product offering, and an expanded commitment to innovation and growth going forward,” he mentioned.