This Week in Imaging: A Closer Look at HP’s Proposed Acquisition of Apogee
The big news this week was HP Inc.’s announcement that it’s seeking to purchase U.K.-based Apogee Corporation, which is said to be Europe’s leading multi-vendor Managed Print Services and office-equipment supplier, and which last year had revenues of $300 million. It employs some 1,000 people, and has 18 offices throughout the U.K. and Ireland, and in France and Germany. As a multi-vendor dealer, Apogee sells HP office equipment, as well as office equipment from Canon, Konica Minolta, and Kyocera. Apogee also provides various document services, including high-volume digital printing, copying and scanning facilities, graphic design and creative print services, and specialist forensic technology and eDisclosure services.
HP says it’ll be purchasing Apogee – following successful regulatory approvals – for $499 million, and hopes to close by the end of this year.
The key take-away here seems to be that HP is expanding its contractual offerings – establishing more “stickiness” with accounts, as it says the majority of Apogee’s revenue is generated under long-term contracts for hardware and services, including supplies, solutions, and printers. In other words, “Apogee augments our existing go-to-market (GTM) channels, enhances our ability to deliver the solutions and services necessary to win in the contractual printing market, and helps grow our managed print service business.”
The acquisition is also intended to bolster HP’s continuing expansion into the $55 billion A3 copier/MFP market, as well into the MPS market, and expand its channel – today, about 90 percent of HP’s business is through its channel. Once the deal is closed, Apogee will become an independent subsidiary of HP, with both HP and Apogee executives on the Apogee board.
HP stressed that it will treat Apogee the same as its other premium partners, and Apogee will continue to sell and service solutions from multiple vendors.
HP Imaging and Print President Enrique Lores also told CRN that the deal is a major step for HP to grow its contractual print business. “We can really advance and accelerate our growth in the contractual space.” Lores also said that the acquisition doesn’t signal a move to increase HP’s direct percentage. Instead, he said, “HP is committed to growing its channel business beyond the about 85-percent mark.”
Lores also told CRN: “The partners should see this as a way for us to demonstrate our commitment to grow and advance our business in the contractual space. They should not see this as a threat. They should see this as a complement to the strategy we have been putting in place in the last few years.”
This Week in Imaging