Prices undisclosed but you can bet it was cheaper
Xerox might not have been able to prise HP Inc stock from the hands of shareholders yet but it has snaffled British print services specialists Altodigital and ITEC Connect for an undisclosed sum.
Simon Ashby, marketing and comms manager at the West Midlands headquartered Altodigital, sent an email to staff this morning – seen by us – to confirm the buy.
“We are writing to announce that with immediate effect Altodigital has been sold and acquired by Xerox,” he wrote.
Ashby said the original plan was for the news to be communicated on a face-to-face basis, but the UK lockdown announced by Boris Johnson on Monday, 23 March, put paid to that.
He told the troops that they would shortly receive a follow-up email from David Days, Xerox president for the UK, Ireland, Eurasia, EMEA and India, “welcoming you to the Xerox group”.
“We are joining Xerox on its incredible journey as it undergoes a digital-first transformation and invests in customer-focused innovation,” he said.
One thing Xerox hasn’t been able to invest in yet is HP Inc. It has launched a hostile $36.5bn takeover of the rival, including nominating 12 directors for election to HP’s board in the summer as part of its campaign to win over shareholders. Initially, Xerox put forward 11 and then earlier this month proposed another as HP expanded its own board. So far, HP’s board has asked for more money and told Xerox it wants to go it alone.
As for Xerox, its results have taken a turn for the worse since June 2018, losing a couple of billion in revenue during that time. Print is a tough place to be, what with the alternative supplies market turning the traditional “razor” sales model on its head, something that HP has tried to address.
Back at Altodigital today, Ashby continued: “As staff members you have no reason to be anxious about this change [of ownership]; there are no plans for staffing changes and all of your questions will be answered in our FAQ which you will shortly receive.”
But in the “meantime”, he warned, “please stay safe and adhere to government guidelines in any way you can. You remain our most important asset and safety and wellbeing of all our staff is paramount to each one of us.”
Altodigital was incorporated in 1986 and its last filed accounts for the year ended 30 September 2018 show revenue of £71.2m versus £106.8m in the prior 18-month period. It reported a loss of £663,592 compared to a profit of £672,169, due to the cost of exceptional items, the waiver of intracompany balances and interest repayments.
Nick Orme, group CEO at Bristol-based ITEC, said it too will become wholly owned by the Xerox group, saying he has always wanted its next owner to have the “resources and determination” to push the company.
In a statement, Xerox exec veep and president of EMEA ops Xavier Heiss said the strategy is to “grow in the small and midsize business market” and that the two buys play well to that.
In the year to 28 February 2019, ITEC reported sales of £39.7m, up from £27.85m, and made a loss of £1.02m as distribution costs and overheads soared.
The two purchases by Xerox will certainly cause ripples in the print services market as the national players watch their back. Vendors buying channel businesses is rarely a cause to celebrate as it introduces conflict into the market. And HP will be watching the progress with interest too because that rather aggressive courtship isn’t yet over. ®