In a story that was merely semi-surprising, if only because rumors arose last week, HP Inc. announced Monday morning that it would acquire Samsung’s printer business in a deal valued at $1.05 billion.
The largest print acquisition in HP’s history takes advantage of the company’s recent separation, which allows it to become “nimble and focus on accelerating growth and reinventing industries,” said President and CEO Dion Weisler.
With the acquisition, HP appears to be specifically seeking to leverage Samsung’s A3 technology. In its press release and subsequent conference call discussing the transaction, Weisler outlined the firm’s strategic rationale for the acquisition, noting it is a unique opportunity to “accelerate our strategy to disrupt the $55 billion copier segment,” a logical adjacency where HP is currently underrepresented compared to its position in the A4 market.
Weisler and the rest of the HP team were emphatic in stressing that the firm’s 30-year relationship with Canon, which manufactures HP’s A4 engines, would not be disrupted by the acquisition. Weisler stated that Samsung printers that “overlap with our current laser portfolio with Canon will be transitioned to our HP brand. We expect our alliance with Canon will continue with an even stronger focus on creating value for our laser printer customers.” Adding onto that statement in response to an analyst question, Weisler stated, “This is not a Toy Story movie where Buzz Lightyear supercedes Woody. … We have a very strong core business together with Canon. … We think it has a lot of runway left in the future.” He also noted that although HP and Canon have been partners in the laser business for many years, the two firms have been “fierce competitors” in the inkjet business. “We have very clear lines between those businesses; this is just another example of that. We’re going after the A3 copier space in the same way that we go after the ink space today.”
So emphatic was HP in making this point that it included a quote from Canon Chairman and CEO Fujio Mitarai in its press release, which appears to put Canon’s stamp of approval on the transaction, saying "This transaction will further evolve our collaboration and bring about growth for both of our companies."
The deal is expected to close within the next 12 months. According to Enrique Lores, president, Imaging & Printing, “Until the close of the deal we will leverage a commercial agreement to start building products with Samsung technology under the HP brand.”
HP announced the first round of those products today: its new portfolio of A3 MFPs that includes three PageWide devices and 13 LaserJets — those 13 LaserJets are built on Samsung engines; part of that commercial agreement Lores referred to. We’ll delve deeper into this launch in future coverage, but for the moment it’s worth noting that HP appears to be serious about this foray into the A3 space from both the ink and laser side. We were part of an exclusive group of analysts invited to Boise to preview HP’s new product lineup, and can say with certainty that, fully cognizant of its misfires in the past, HP has put some serious investment into its A3 strategy. The firm is adamant that its new product line is a line of A3 printers that will compete with copiers, rather than copier technology. The firm is focusing a great deal on its partner strategy as well, streamlining its Partner First program, offering HP Smart Device Services to qualified channel partners, and announcing its JetAdvantage on Demand cloud program.
The next step: The dealers. HP is rolling all of this out at its Global Dealer Conference in Boston today, and is understandably invested in their feedback. What are their thoughts? We’ll be covering that next, so stayed tuned to The Imaging Channel for meaningful and timely insight.