Purchase of Scitex Vision expands Hewlett-Packard's portfolio and positions it to capture share of expanding digital commercial printing market.Hewlett-Packard Corp. has signed an agreement worth $230 million in cash to acquire super-wide digital printing company Scitex Vision, within Israel-based Scitex Corporation Ltd.
Ryan J. Donovan, spokesperson for HP said in a phone interview, "This acquisition cements the Hewlett-Packard franchise by taking us into the high growth, high margin super-wide printing arena."
Donovan said that industry estimates show roughly 17 percent of printing is digitally produced, and HP is expecting that to double in the next five years. Donovan termed Scitex Vision a "terrific" choice and noted that it currently holds an estimated 65 percent of the worldwide market share in the wide and super-wide format arena.
"We know the market is moving aggressively toward digital. The Scitex Vision purchase is a key part of our strategy to digitize 88 percent of the pages printed by analog systems. From a segment growth standpoint, signage is one of the fastest growing segments," said Donovan.
Analyst Grey Held, director of Supplies Advisory Service for Lyra Research, said the announcement clearly signals HP's growing commitment to the commercial printing market.
"While other markets, like consumer and office, are relatively mature, the commercial printing market is at the beginning stages of growth, and HP wants to be part of that growth," said Held.
Held also said HP's size and brand give it the clout to help drive growth in the
commercial printing market as it transitions from traditional processes, like
offset and screen printing, to digital.
"HP's purchase of Indigo a few years ago and now HP's planned acquisition of ScitexVision, underscores the commercial printing market as an HP priority," said Held.
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In the long-term, the proposed acquisition will also give customers more print solution options.
"The commercial printing market is evolving, and many shops that have been
focused on narrow format are moving into wide-format and vice versa," said Held. "So in
the short term, HP can leverage-sell Scitex Vision equipment to current Indigo customers and, likewise, HP's Indigo customers may be ready to leap into the kind of wide-format solutions offered by Scitex Vision.
Scitex Vision's proprietary Piezo printhead technology complements HP's thermal print head technology, and with the acquisition HP also gains technology that will expand its inkjet printing limits, said Held.
Pending regulatory and shareholder approval, the transaction is expected to close within 90 days. Donovan said after a period of integration that will last roughly a year, the 560 worldwide employees of Scitex Vision will be absorbed into HP.
