Tim Mueller’s Transaction Analysis: New IT M&A Deals Aug 6

HP To Acquire Apogee for $500M

Financial Information*

  • Enterprise Value ~$500M
  • EV/LTM Revenue N/A
  • EV/LTM EBITDA N/A

Transaction Facts

  • 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.

To receive instant analysis on the day’s business news from Tim Mueller, contact [email protected]. Check out a list of diverse assets for sale on SBN’s IT M&A Marketplace powered by IT ExchangeNet here.

IT ExchangeNet is the industry-leading marketplace for matching buyers with sellers of mid-market IT businesses. Founded in 1998 by technology CEOs and M&A professionals, IT ExchangeNet is an efficient marketplace for owners of mid-market IT businesses seeking buyers or strategic partners. ExchangeNet follows a disciplined and highly targeted process, bringing buyers and sellers together to close deals with transaction values of less than $25 million.