The Industry Talks M&A
Toward the end of May, some big activity happened in the MPS space: Within 24 hours, two acquisitions were announced. HP acquired all of the assets of Printelligent, and Xerox acquired NewField IT.
HP acquires Printelligent
In the IDG article “HP signs deal to acquire Printelligent,” Ralph Jennings looks back to 2009 when HP said it “would form a new group to step up managed print services and start a program to help business customers reduce printer hardware. The company already offered printing services at the time, but the dedicated business unit was expected to add to that focus.”
The acquisition of Printelligent just three years later falls right in line with what HP strategized in 2009. Printelligent, headquartered in Salt Lake City, Utah, gives HP the successful infrastructure, software and workforce of the MPS company, and is said to strengthen HP’s services for small and midsize business clients, where 14 to 23 percent growth is expected.
Xerox acquires NewField IT
Just hours after HP’s announcement, Xerox revealed its acquisition of U.K.-based consultancy and software solution provider, NewField IT.
Xerox’s acquisition “really narrows the field of software vendors and raises the value of the independent vendors remaining on the field,” wrote Misty Hamel in the MPS Insights article “It’s raining acquisitions: Xerox acquires NewField IT, HP acquires Printelligent.”
The aftermath
There have been a few merger and acquisitions so far in 2011. In March, ECi acquired FMAudit, and earlier in May, Nuance Document Capture acquired Equitrac. Now, just over a week after the HP and Xerox announcements, the dust has settled a bit, but the industry is still talking, begging the question: Who might be next?
According to a recent Photizo webinar on M&A activity, consolidation will continue, and it is predicted that “MWA Intelligence, PrintFleet (and) Print Audit will be looked at closely as acquisition targets in the near future, … (as they) stand out as the top independents remaining.”
Although in his article “HP, Xerox beef up managed print services via acquisition,” Larry Dignan doesn’t speculate who is next, he certainly doesn’t see M&A slowing down anytime soon. “MPS is deemed to be a growth market by industry analysts and that fact has attracted a lot of competition. … In other words, MPS is a four horse race and these companies (Xerox, HP, Ricoh and Canon) are looking for tuck-in acquisitions to get an edge.”
Even on a more casual forum, people are asking questions. In The Death of The Copier Group on LinkedIn, member Mimi Evenson, managed print services consultant at HP, posted: “It goes without saying that we at HP are very excited about the acquisition of Printelligent. What are you thinking? Reaction?”
Lisa Shapiro-Barr, major account executive at IKON, responded: “The race by the manufacturers to acquire every company out there in the MPS/MDS world appears to be heating up. It's almost comical, like a business world version of Pacman.”
Greg VanDeWalker, chairperson at CompTIA MPS Community and vice president, strategic relationships, at GreatAmerica Leasing, also responded, asking: “How many other companies is HP looking to buy? Is HP going to mimic the Global model or try to build out organically from Utah?”
Unfortunately, there was no response.
People in the industry, including we at TIC, are definitely curious. Now that we are nearly halfway through the year, it will certainly be interesting to see what happens in the next six months.
Posted by Katherine Fernelius on 06/06/2011