In a deal worth US$117 million, HP is buying NUR Macroprinters, an Israel-based maker of wide-format digital inkjet printers widely used by the commercial graphics industry.
The deal will enlarge HP’s footprint in the world of graphic arts by allowing it to offer more mid-range platforms and technologies based on ultraviolet-curable inkjets, HP said.
The wide-format inkjet production printers and inks NUR develops, manufactures, markets and services are used by companies worldwide to “produce a vast and innovative range of out-of-home advertising materials.” These include point-of-purchase displays, billboards, banners, building wraps and vehicle graphics, said the company.
NUR is “continuing a tradition of pioneering in UV inkjet printing” by offering both flatbed and roll-to-roll UV inkjet printers that break “new ground in the industrial wide-format printing market,” the company said.
NUR’s UV-curable and solvent inkjet printers are used by commercial printing companies, sign printers, screen printers, billboard and media companies, photo labs and digital print service providers, HP noted.
Another Wrench in the Toolbox
HP decided to buy NUR in an effort to expand its “Print 2.0” strategy to digitize analog content. The acquisition “marks another milestone in HP’s growth strategy to ignite the transition from converting analog pages to digital pages,” HP Imaging and Printing Group Executive Vice President Vyomesh Joshi said.
The large-format print service provider market is quickly growing. By buying NUR, HP “is strategically building an even stronger portfolio of products” and hopes to “drive innovation and growth” with its industrial wide-format printers, added Joshi.
The NUR deal is not the first in HP’s effort to widen its portfolio of digital presses and wide-format printers. Three months ago, HP acquired MacDermid ColorSpan, another manufacturer of wide-format digital inkjet printers “and a key supplier to sign shop franchises, quick printers and other small to midsize sign-making and screen-printing businesses,” said HP.
The deal is part of HP’s move to challenge other players in the commercial printing industry, such as Xerox and Heidelberg, said Ed Crowley, founding partner and CEO of the Photizo Group, an investment research firm specializing in the printing and imaging industry.
“This is a continuation of HP’s strategy to acquire companies that help it expand into the higher volume, higher value print areas,” Crowley told the E-Commerce Times. “They are really starting to compete with a host of firms that supply the digital printing shops.”
Traditionally, HP’s mainstay — in terms of printing — was its products for what Crowley called the “distributed” printing space: “Everything from home printers to printers used in corporations, like workgroup laser printers. What they are moving into is the commercial printing sector. It’s a completely different market.”
Saved From the Brink
Control of NUR was acquired two years ago by Fortissimo Capital. At the time, NUR was in bad shape, according to a statement from Yuval Cohen, managing partner of Fortissimo Capital and chairman of the NUR board of directors.
“Two years ago, when Fortissimo Capital acquired control of NUR, the company was losing money and was in a precarious position,” said Cohen. “However, Fortissimo Capital recognized that NUR had the potential to build on its strong market presence, installed base and technology leadership, and infused the requisite capital to fund its growth.”
Fortissimo and several banks restructured NUR’s debt, recruited new management and made other changes that turned around the company. “We believe that NUR is at a point where it requires the HP resources in order to bring its line of business to a new level,” Cohen explained.
When the acquisition is complete, NUR will be integrated into HP’s Large Format Printing Business within the company’s Imaging and Printing Group.
HP agreed to pay $117.5 million in cash to NUR, but $14.5 million will be held in an indemnity escrow account. $9.5 million will be held for 18 months and $5 million for 24 months.
NUR will keep about $5.5 million in cash and will use about $20.8 million to repay its bank loans. The deal will be closed soon as required approvals are obtained.
NUR has about 72.7 million shares issued and about 54.4 million outstanding warrants and options convertible into shares that if fully exercised will bring the company about $24.5 million in cash, the company said.
The deal is a wise move for HP, said Brenon Daly, a financial analyst with the 451 Group.
“Keep in mind HP gets a quarter of all its revenue from its Imaging and Printing Group … and nearly half of its overall operating profit,” Daly told the E-Commerce Times. “It is a hugely important group for HP and this is them just putting some resources into that group.”
Investors tend to focus on HP building out its software portfolio and also talk a lot about its efforts in selling computers, Daly said. “But this [deal] is building out their mainstay core printing business,” he said. “It makes a ton of sense. This is them buying what they know very well, which is the printing business.”