Hewlett Packard (HP), the world’s second largest computer company has signed an agreement with Israeli company Indigo for co-development of high-end digital color-printing systems. According to the agreement, HP will invest $100 million in Indigo and market its digital printing systems through an OEM arrangement.
Under the agreement, HP will acquire 14.8 million Indigo new ordinary shares at $6.75 per share. Indigo will also grant HP 12 million options at the same price, providing that certain targets are achieved.
Although Indigo leads in its field, it has not been considered greatly successful to date, at least from the standpoint of its share price. The company issued in 1994 at $20 per share, reflecting a company value of $1 billion. The value climbed to $3 billion, but the company’s results were disappointing and its machines failed, which made the share price fall. Since then, its business results and share price have caused Indigo to be considered a failure.
The agreement opens extensive future possibilities to Indigo. HP and Indigo will co-develop and co-manufacture advanced solutions for digital color printing. Release of these solutions is expected in the spring of 2001. In addition, HP will market selected products from Indigo’s line of high-end digital printing solutions under its own brand-name.
The alliance with Indigo secures advanced appliance technology for HP that will expand the possibilities for delivering to customers a greater selection of printing e-services running on an always-on infrastructure. HP’s printing e-services strategy, unveiled April 19, sets out to transform the role of printers from that of static document-delivery devices for producing to service-delivery platforms.
Last night HP announced it expects to become a partner in the Israeli consultants firm Kesselman. If the deal is realized, HP will acquire the computer consultant division of the PricewaterhouseCooper chain. The transaction is estimated at $17.5 billion, and is expected to affect Kessselman, which has a partnership with PricewaterhouseCooper. If the agreement is realized, it is assessed that Kesselman will sell part of its shares to HP.
Published by Israel's Business Arena on September 14, 2000