HP is dropping over $1 billion dollars on the Samsung printer division in a deal announced by both companies this morning. HP is looking to expand into multi-function printers and managed print services, perhaps to better compete with Dell and other PC makers. Analysts believe the Samsung printer deal could bolster HP’s profit as the company has been struggling lately and it could help them compete overseas. But while HP has been struggling, this deal may come at just the right time for Samsung amidst the Note7 recall and extremely bad press.
Samsung issued a worldwide recall of their flagship Android smartphone which is expected to come at a heavy cost. Not only will they be replacing or refunding millions of smartphones but the public relations fallout could be devastating. The FAA is already asking passengers not to use their devices on planes, some retailers are not backing up Note7 users data for fear of plugging the devices in. This deal with HP for the Samsung printer division could help offset the high cost of the Note7 fallout.
- Samsung’s printer business includes roughly 6,500 printing patents, as well as 1,300 researchers and engineers.
- HP will also continue working with Canon, particularly in the managed print services (MPS) market.
- The deal is expected to close within 12 months, pending regulatory approval.
- The acquisition is expected to be accretive in the first full year following closing, meaning that the acquisition will boost net income within its first year.
- Samsung will purchase $100 million to $300 million worth of HP stock within a year of the deal’s completion.
The deal looks to be mutually beneficial for both HP and Samsung, HP get some much needed bolstering in the market and Samsung gets cash it likely will need to offset it’s current woes.
What do you think of the HP/Samsung printer deal? Let us know in the comments below or on Twitter, Facebook and Google+.Source: Channele2e