Managed Print Services Take Center Stage – September 2016 M&A Activity
HP, the spun-off printer and PC division of the technology powerhouse, doubled down on the small-format distributed printing device market, acquiring Samsung’s printer division. The acquisition is HP’s play to stay dominant in the market for office printing devices, squarely in direct competition with Xerox, Canon, Epson and Brother in the $55 billion market for office printing devices. These machines that can quickly print multiple copies in networked office environments are often installed and maintained by outside service organizations known as Managed Print Service (aka “MPS”) companies. Viewed as distinct from the $80+ billion printing industry, these companies compete on a per-page cost basis, maintaining fleets of multi-function printers installed at their customers’ offices. Known as “MFP” devices, the machines scan, copy, fax, email PDF’s, and yes, also print on paper. For large corporate customers, the MPS companies will retain ownership of the machines and provide onsite staffing to operate and maintain corporate in-house print centers, as well deploy MFP’s distributed throughout the customer’s facility.
As we adjust to reading just about everything on digital devices (we suppose millennials are leading the way), shipments of MFP printing devices and supplies have been declining. According to industry research firm International Data Corporation, HP had 36% of the market for printers, but also had the largest decline year-over-year, compared to competitors, an 18.6% decline in the first quarter of 2016. The acquisition of Samsung’s printing business changes the calculus of the decline and will keep HP clearly in the lead if it can execute the integration. With the addition of more than 6,500 technology patents, 1,300 research and development engineers, and thousands of sales, support staff and manufacturing employees, HP gains Samsung’s laser-toner expertise, and of critical importance, cutting-edge inkjet technology. Added to the success of the HP Indigo digital printing devices in the commercial printing and packaging industry, and the PageWide web presses in the direct mail and transactional printing segments, it’s clear that HP is betting that paper-based communications will be good business.