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HP to Acquire Apogee for $500M
martinwolf Transaction Analysis
- Enterprise Value ~$500M
- EV/LTM Revenue N/A
- EV/LTM EBITDA N/A
HP (NYSE: HPQ) announced yesterday its definitive agreement to acquire UK-based managed print services provider Apogee Corporation for £380M, or ~$500M.
- As part of the agreement, Apogee will operate as an independent subsidiary of HP.
The deal is expected to close by the end of this calendar year.
Advancing Its Managed Print Services Operations
Strong Relationships: Apogee not only has relationships with HP but also with major print vendors like Xerox, Konica Minolta, Kyocera and Canon. With 1,000 employees and $300M in annual revenue, Apogee is the largest independent print provider in Europe. Since Apogee has a strong portfolio of high-margin contractual printing services, many of which are long-term contracts for the delivery and sale of hardware and services, HP can be optimistic about revenue gains down the line; the giant can tap into Apogee’s current access to SMB and mid-market customers through forthcoming contract renewals.
- Rich Acquisition History: In 2016, private equity firm Equistone Partners invested in Apogee in a transaction valuing the company at ~$230M. Under its PE parent, the company was able to make several acquisitions, including CityDocs, Danwood and EFCO Corporation.
- Market Share Growth: Through this acquisition, HP is expecting to gain more market share in the A3 copier space, currently valued at $55B. The giant also is looking to expand its MPS business to new channels.
- Successful Past: This deal is the next biggest after HP’s first major acquisition in the A3 market with its purchase of Samsung’s printer business for $1.05B back in 2016. The Samsung acquisition gave its printing unit a strong boost, as HP reported its printing revenue has been steadily growing at 11 percent year-over-year in May.
For more information about this transaction, click here to read the press release.
*Financial information from the press release and FactSet.
martinwolf was not the advisor in this transaction.