Inkjet Wholesale News aims to provide updates on the latest significant occurrences in the field of printing. Whether it’s the launch of a new technology or volatility of market prices, we’ll be here to give you the lowdown on what happened, when it happened, and what it means!
Analysts Predict Potential HP Acquisition by Third Parties with HP Enterprise Particularly in the Fray
Earlier in March this year, we reported the impending split in HP’s operations. The operational split which is due in November this year will cause the creation of two organisations which will go by the names HP Enterprise and HP Inc. Now that the split is closer, analysts across the world have been trying to figure out what the future holds for the two organisations.
To this end, most analysts seem to be predicting an HP acquisition. These predictions on HP acquisition have mainly been revolving around HP Enterprise. Analysts have been predicting an HP acquisition for at least four years now. These predictions were prevalent even before the split was announced.
For instance, in August, 2011, Forbes reported that Oracle may be considering acquiring HP. The story had its root in the massive selloff of HP stock reported by The New York Post. This massive selloff of HP shares followed by drop in share prices made the company vulnerable to hostile takeovers according to the Post.
The prediction was further fuelled by the perceived hostilities between the senior management of Oracle, Larry Ellison and Mark Hurd, and the senior management of HP, Leo Apotheker and Ray Lane.
There is history between the two companies and none of it is positive.
Mark Hurd was the CEO of HP before he left while Ray Lane held the number two position at Oracle before he moved to HP because he found out that Ellison wasn’t going to step down.
A hostile HP acquisition, according to analysts, is only viable for Oracle if the HP PC business is separated from its enterprise business.
The reason for this is that Oracle wouldn’t be interesting in owning an HP acquisition involving the company’s PC business. Interestingly, this is exactly what is going to happen in November of this year.
This is possibly why analysts are predicting an HP acquisition from Oracle involving HP Enterprise. Still, Oracle’s HP acquisition is firmly in the speculation category primarily because the financial elements are not favourable without significant changed. In simple terms, analysts are not completely sure that Oracle has the funds to acquire HP Enterprise.
The nature of the two companies being formed by the HP split also seem to be paving the way for HP acquisitions.
For example, once the split is over, HP Enterprise is expected to have extremely small profits which can dive into losses too.
This will happen because it won’t be able to rely on the high returns on HP’s PC business. As a result, HP acquisitions involving HP Enterprise will become even more likely.
On the other end, HP Inc.’s large profits will be weighed down by the debt that it will be taking on. HP Inc. will be taking on debts that will be valued somewhere in the 50 percent region of its total turnover.
This is a significant amount of debt which will eat into the new company’s returns very quickly. Additionally, the largest returns that HP Inc. will get will be from its consumables business. However, this sector is expected to decline as people move away from genuine consumables to compatible and generic consumables.
It is not just Oracle that has been mooted to be after an HP acquisition. A few other names have been mentioned as well. The Register in the United Kingdom reported in 2014 on a Wall Street Journal story which explained that EMC has been interested in HP acquisition as well. However, the same story explained that the discussions over the HP acquisition had stalled.
Similarly, other names from the Chinese business sphere have been mentioned such as Lenovo. However, the current relationship between China and the US may not be conducive to this type of an HP acquisition. Moreover, Lenovo may have trouble digesting any HP acquisitions on grounds of its current business situations. Samsung could consider HP acquisitions as well but it will not be able to do so unless it turns around its current financial limitations.
In the end, as per many analysts, an HP acquisition is already on the horizon and may become a reality very soon. This may be the future of HP Enterprise. On the other end of the spectrum, it is expected that HP Inc. will suffer for a while before being turned around on the back of Dion Weisler’s innovative policies, if they come through.
Epson’s DGM for Sales and Marketing for Prographic Products Reports Rs 1078 Crore Turnover
Epson’s growth continues with the latest positive developments being reported from India. In an interview with PrintWeek India, the Deputy General Manager of Sales and Marketing for Epson Prographic Products, Vasudevan KL, reported that the Indian arm of the global Original Equipment Manufacturer (OEM) has crossed the crucial Rs 1,000 crore (10 billion).
According to Vasudevan KL, the company ended the last financial year with a turnover of Rs 1,078 crore. This number translates to about 228.65 million in Australian dollar. In addition to providing the total turnover of Epson India in the last financial year, Vasudevan KL also revealed that achieving these numbers means that the company witnessed a growth of a considerable 23 percent over the previous financial year.
More crucially, Vasudevan KL revealed that Epson India has been the market share leaders in virtually every category that they’ve marketed their products in. Moreover, each of their product categories has seen ‘tremendous growth’ in the last financial year. Additionally, the company’s digital label press business seems to have done as well.
In terms of going forward, Vasudevan KL may have given a hint towards what his company may be planning in the future. According to him, Epson India is seeing potential for growth in areas beyond that of conventional printing such as value added services. This may hint at enterprise level customised solutions for various clients in the country.
Specifically, Vasudevan KL mentioned expectations from customers with regard to being able to deal with more materials as well as features involving with printing on a diverse range of materials. He also touched on the relevance of digital printing, stating that it makes for greater variation in potential printing applications and solutions.
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