HP Inc. (HPQ) will purchase Samsung’s (SSNLF) printing business in a deal that is valued at $1.05 billion. The company announced the acquisition early on Monday morning and is a step into diversifying the company’s holdings to rely less on the struggling personal computer market.
Three facts to know about the acquisition are:
HP will get a lot bigger following the acquisition. Samsung currently employs 6,000 people in its printing business, and all of the employees are expected to transition with the purchase. The company will inherit 2,000 R&D engineers as well as 1,000 employees in sales and support.
The remaining 3,000 employees are part of the company’s service and manufacturing end.
The acquisition will allow for HP to further enter into Asian markets. The purchase of the business also includes nearly 6,500 patents and Samsung’s laser printing technologies. HP has stated that the company wants to enter into the copier market, and the acquisition makes further sense as a result.
Samsung’s laser printing technology will be crucial for HP’s foray into the copier market, which utilizes laser printing to allow for fast, precise copies.
Samsung has been diversifying their holdings to focus on their core operations. Samsung doesn’t disclose how much the company’s printing business earns, but the company focuses on business sales in the printing industry.
The companies expect the sale to be finalized in the second half of 2017. IDC’s May report shows that HP has a 36.3% market share in terms of printer shipments in Q1 2016. Samsung has a 4.4% market share of the industry.
The printer market is shrinking, with inkjet printer sales down 11.1% year-over-year and laser printer sales down 10.5% year-over-year.
The acquisition will help HP regain revenue in the market as the company’s printing business sales dropped 16% year-over-year for the nine-month period ended July 31.