Following its move earlier in the week to acquire Compaq, Hewlett-Packard Company announced today that it is to acquire the remaining outstanding shares of Indigo, a leading commercial and industrial printing systems company.
The acquisition of Indigo, which offers a broad range of digital colour printing presses, positions HP for a major thrust into commercial printing, a $400 billion market.
HP currently owns 14.8 million of Indigo’s common shares, representing 13.4 percent of the company’s outstanding shares. Under the terms of a new agreement signed today, HP will acquire the remaining shares of Indigo for approximately $629 million in HP common stock and a potential future cash payment of up to $253 million contingent upon Indigo’s achievement of long-term revenue goals, for an aggregate potential payment of up to $882 million. The transaction is expected to be accretive to earnings per share in its first full year of operation.
Indigo extends HP’s printing systems portfolio beyond inkjet and LaserJet technology into a third high-speed colour print technology and accelerates the company’s plans to transform and lead the rapidly evolving commercial printing market.
With the addition of Indigo, HP will sell offset-quality digital press solutions and services that will enable businesses to more effectively target and retain their customers with short-run, personalized business communications linked to digital document creation.
Indigo’s liquid electro-photography (LEP) technology spans commercial printing, industrial printing and photo-finishing. LEP combines digital laser imaging with ultra-small ink particles enabling prints to be produced at offset printing speeds.
Indigo is a $200 million business with 1,100 employees. It is headquartered in The Netherlands, and has R&D and manufacturing operations in Israel. Upon completion of the transaction, Indigo will operate as a new division within HP’s Imaging and Printing Systems business.