HP, Eyeing Commercial Market, Acquires Indigo

On September 6, the opening day of Print 01, Hewlett-Packard Company (HP) announced an agreement to acquire the remaining outstanding shares of digital color press manufacturer Indigo N.V. for about $629 million in HP common stock and a potential future cash payment of $253 million contingent on achievement of long-term revenue goals, specifically Indigo's achieving of $1.6 billion in revenue in three years following the closing of the transaction.

The move, says HP, strengthens its $20 billion business in imaging and printing and positions it strategically for expansion in the digital commercial printing market.

At the announcement, Bill McGlynn, vice president and general manager of HP's commercial printing solutions unit, said the deal represents HP's strategic intent to move its imaging portfolio beyond ink-jet and LaserJet technology into a third high-speed technology for the commercial printing market "in an extreme way."

He added, "We have been on the sidelines for a long time and can't wait to bring our whole new stable of ideas into the commercial printing marketplace."

Indigo's chairman and chief executive, Benny Landa, noted, "We're doing this together as a truly joint operation. This is the show where people are going to say that the real battle in digital color printing began. We feel the stakes are enormous." Indigo is a $200 million business with 1,100 employees.

Vyomesh Joshi, president of HP's imaging and printing systems operation, says HP intends to lead the transformation of commercial printing into a Web-enabled, all-digital industry.

Three days earlier, HP revealed that it intends to merge with Compaq Computer Corporation, creating a global company with projected annual revenue of $87 billion and 145,000 employees. The resulting entity, say managers, will have top revenue positions in servers, personal computers and handheld devices, IT services, storage and management software, and imaging and printing.