HP on Wednesday said it's buying UK-based office equipment supplier Apogee for around $444 million. With the deal, HP is hoping to gain traction in the $55 billion A3 copier space and expand its Managed Print Services (MPS) business to new channels.
HP said Apogee brings a strong portfolio of high-margin contractual printing services, with access to SMB and mid-market customers with increased profit pools.
"The Apogee acquisition extends HP's print leadership by boldly leveraging the industry shift to contractual sales as we aggressively pursue the A3 office market," said Enrique Lores, president of HP Imaging and Print. "This deal complements our broader channel strategy and HP remains committed to building our business through our partner program."
This is HP's first major acquisition in the A3 market since it scooped up Samsung's printer business for $1.05 billion back in 2016, giving its printing unit a significant boost. In May, HP reported that its printing revenue was up 11 percent year-over-year, with commercial gains driving the business.
The majority of Apogee's revenue comes through long-term contracts for the delivery and sale of hardware and services, including supplies and other printing related products. HP expects to see revenue gains over time as contracts come up for renewal over the next few years.
HP expects the Apogee deal to close by the end of the current calendar year, pending regulatory review. Afterwards, Apogee will operate as an independent subsidiary with a governing board mixed with HP and Apogee management. Apogee's current management team will stay in place for now, HP said.