RBC Capital Markets analyst Amit Daryanani says HP will be able to lessen its reliance on Canon technology through the Samsung printer business acquisition. This transaction is part of a move to concentrate on its core business areas.
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According to HP’s president and CEO Dion Weisler, this deal would not have been possible had the company not split from its enterprise business, HPE, last year.
Samsung will spin off the printing unit as a separate company on Nov 1 in order to sell a 100-percent stake in the separated company to HP. Samsung’s printer business now has 6,000 employees along with 50 global sales offices and production facilities in China.
In today’s deal, HP gains an intellectual property portfolio of more than 6,500 printing patents and a 6,000 member workforce that includes almost 1,300 researchers and engineers with advanced expertise in laser printer technology, imaging electronics and printer supplies and accessories.
HP said that Samsung has a “formidable portfolio” of A3-capable MFPs, and that integrating these business devices with HP’s PageWide tech will “create a breakthrough portfolio of printing solutions with the industry’s best device, document, and data security”. Canon and HP said their existing partnership will continue, however. When the company reported earnings last month, it said restructuring activities were on track for the fiscal year, including about 3,000 job cuts.
HP will also be gaining 6,500 printing patents. After closing, Samsung will make an investment in HP, through open market equity purchases, of between $100m and $300m.
HP said the acquisition would help it to “disrupt and reinvent” the $55bn copier industry, a segment that “hasn’t innovated in decades”.
“We’ve been working with Samsung to build this portfolio during the previous year and when we saw the power of the technology we had, we realized that it was a technology we wanted to own”, said Enrique Lores, president of the imaging and print solutions at HP.
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HP’s printing division took a bit of a hit with its revenue falling by 14 per cent in the latest quarter, while overall sales was down about 4 per cent to United States dollars 11.9 billion.
