An analysis by Digital Printer editor Barney Cox.
With Kodak announcing it is in discussions to sell its inket business it is fun to speculate who it might be. http://bit.ly/1R2GUBm
Is the key to the most likely suitor Kodak chief executive Jeff Clarke’s reference to the need for a company with a ‘larger sales and distribution footprint in digital printing markets’ to take full advantage of the technologies’ potential?
Maybe, but maybe not. If the major opportunities for Prosper, and in particular the newer Ultrastream technologies, lie in higher volume markets currently addressed by analogue printing, as the company has stated, then a digital sales team may not be the most important consideration. More important will be an understanding of those markets with established relationships and brand recognition throughout the supply chain, including with brands, printers and partners. An understanding of the digital economy will be important but so too are deep pockets and technological expertise.
Of the higher volume printing markets, awaiting digitisation packaging in its various forms has got to be the ultimate end game for any suitor in terms of sales revenues, regardless of whether they measure them in litres and square metres.
Potential acquirers can be roughly divided into three categories, which are somewhat arbitrary and blurred. There are ink companies such as SunChemical and its parent DIC, Flint and Eckart. Inkjet companies including Brother, Danaher, EFI, Epson, Fujifilm, Konica Minolta, Kyocera and Ricoh. Lastly, there are digital print companies including Canon, EFI, Fujifilm, Hewlett Packard, Konica Minolta, Ricoh and Xerox.
The question is, out of all of those vendors, who has the scale, money, expertise and vision in the right proportions to be the most attractive proposition?
Top of my list of prospects would be Fujifilm and SunChemical/DIC with Danaher or Flint running close behind. Digital print vendors in with a strong shot include Canon, HP and Ricoh, with EFI more of a wildcard.
For the traditional ink vendors, even those with some digital expertise already, the business would be a defensive move to ensure continued success in a digital economy. For the digital businesses it is a gateway to new markets and further growth.
Overall, if I had to call it based on my knowledge of the market, Fujifilm seems to be the strongest bet. Why? Because it has expertise in the core technologies of colourants, inks and printheads; and has experience of integration and working with partners to bring products to market in the most appropriate manner. Its own strong brand and market presence as a direct sales organisation are complemented by the ability to sell colourants, inks and printheads to rivals when there is mutual benefit.
*Please note this is an academic exercise and is not based on any in depth research; in particular no attempt has been made to understand the financial position of any company, a fundamental consideration in the acquisition process.
