Hewlett Packard announced Thursday the acquisition of Indigo, an Israeli company that makes industrial and commercial printing systems, in a deal that could potentially be worth $830 million. HP, the world's leading maker of printers for personal computers, will purchase 86.6 percent of Indigo in exchange for $629 million of HP shares, and an additional sum of $253 million in cash if Indigo generates more than $1.6 billion in revenue over the next three years as part of HP.
The basic deal includes a $7.5 price for Indigo share. Indigo shares closed at $6.3 on Thursday, and the company has a total market value of $700 million.
Benni Landau, founder of Indigo and Chairman of the Board of Directors, will likely resign from his position. Indigo will become a digital printing division of HP.
HP entered the commercial printing business this summer with a new digital press that lets companies produce brochures and other color documents in bulk themselves. That press combined Indigo technology and HP software.
"The speed, image quality and cost effectiveness of Indigo's technology will now be available to a larger audience through HP's brand strength and global reach," said Vyomesh Joshi, head of Hewlett-Packard's imaging and printing division. "We believe we can grow our commercial printing division over time into a multibillion-dollar HP business."