Inkjet head manufacturer Xaar has bought one of its customers, Engineered Printing Solutions. But this does not mean that the Huntingdon company is aiming to become a provider of printing systems nor that it will be competing with its OEMs.
Instead the acquisition brings Xaar a technology leader in the diverse field of direct to product printing and plentiful experience in printing on non co-operative surfaces and at integration.
Engineered Printing Solutions in based in Vermont and its products span the range from pad printing to various types of inkjet. The products, often of a custom design, are used to print on bottles, on saw blades, on membrane panels, on apparel, on toys and sports equipment. These generate sales of $14 million a year.
The company is one of a number of businesses producing these types of industrial printing machines scattered around the world says Xaar CEO Doug Edwards. EPS has, however, been ahead of the curve in developing solutions built around inkjet printing. Many of the other companies, says Edwards, are clinging to pad printing to decorate promotional items, tin lids and so on.
Edwards first met EPS founder Julian Joffe a year ago, when introduced as a customer by Xaar’s US director. That led to the acquisition and adding EPS to Xaar’s strategic plans for growth towards a £220 million business by 2020. It will form part of one of four pillars that the business will be built on: industrial and functional printing. Each will have revenues of at least £50 million, says Edwards.
While Xaar’s print heads have been integral to a number of direct to shape printing projects, the market continues to prefer printed labels. “We want to see if we can control our own destiny a little,” Edwards says. “There are lots of small players in the space around the world and the area is slowly moving towards inkjet. This is an opportunity to accelerate that.
“What we learn here will be very applicable in direct to shape for label replacement printing.”
Xaar will be able to use its contacts around the globe to introduce EPS to potential new customers. In turn the US company has expertise in integration that will be useful to other pillar’s in the Xaar business, its Printbar project for example. It also gives Xaar a stronger presence in the US, a country responsible for just 5% of the company’s revenues.
This will not be the last of Xaar’s acquisitions. It has £70 million of cash in the bank, before paying $11 miliion for EPS. “We are still looking for companies of this type. There are lots of small regional pad printers around the world that we can help make the transition into digital printing. There is a good consolidation opportunity in this space.” It is an area where digital printing is forecast to grow in double digits.
Edwards is also clear that Xaar will not be taking on its major OEM customers with a move into ceramics or graphics printing. “We will not compete with them,” he says. “This is about building highly bespoke machines for specific purposes. It is not about a company building hundreds of machines of the same type as in ceramic, textile or commercial printing.”
Many of these companies are potential customers for the 5601 thin film print head that was introduced at Drupa. The company gave 60 deep demonstrations to potential partners over the course of the show. It now has to whittle this interest down to companies that it has the resources to work closely with.
“There was overwhelming interest,” says Edwards. “Now we have to pick the handful of people we can work with on integrating and implementing the technology. That perhaps means working with five from that 60, understanding which is perhaps the most fruitful application space for us.”
Doug Edwards says that one reason for the acquisition of EPS is to help kick start the direct to shape market where printing on bottles can replace labels. There will also be advantages in terms of integration knowledge and an opportunity to expand EPS outside North America.
