August 11, 2005 4:36 PM PDT
HP wants to be marquee name in billboard business
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The Palo Alto, Calif.-based computer and printer maker said it's spending $230 million to purchase nearly all the assets of Scitex Vision from its parent company Scitex Corp.
The transaction must still be approved by shareholders and federal regulators. But if all goes according to plan, HP said, Scitex Vision will join its imaging and printing group.
Scitex Vision CEO Dov Ofer and the company's senior management team are expected to stay on with HP and report to HP Vice President Enrique Lores, an HP representative told CNET News.com.
Israel-based Scitex Vision specializes in superwide digital printers--machines that can handle page sizes that max out at about 16 feet.
Rich Raimondi, vice president of U.S. commercial sales for HP's Imaging and Printing division, said the acquisition provides a needed addition to HP's portfolio. Currently, HP's largest designer jet printers can handle pages measuring only 5 feet.
Scitex Vision's XLjet Premium can switch between four, six and eight colors and print 370 by 740 dots per inch at 1,335 square feet per hour.
"Wide-format signage is one of the fastest-growing opportunities in the market," Raimondi said. "Currently, 17 percent of printing in this area is done digitally, and we expect that to double within the next five years."
HP said the other benefits of acquiring Scitex Vision include its $12 million a year R&D investments in inkjet technology, its base of 1,000 customers and its more than 1,700 units sold in the last two years.
Scitex Vision reported revenue of $142 million for the one-year period ending June 30, 2005, HP said. The company has subsidiaries in the United States, Belgium, China, Mexico and South Africa. It also has a presence in another 75 countries.
HP's imaging and printing group has been in transition of late. The division grew to $24.2 billion in fiscal 2004 from $19.6 billion in 2001, while operating profits surged to 15.9 percent from 10.7 percent in the same period, according to HP's last round of earnings statements.
But five months after merging its PC business with its imaging and printing group, HP split them up again.
Back in July, the company also announced that it was undertaking a massive restructuring and losing 14,500 jobs--about 10 percent of its work force--which could still impact portions of its imaging and printing group.