A little over two years ago I published a blog arguing that consolidation happens in all industries and the print industry was past due for a new wave of acquisitions and consolidation.

It wasn’t the most daring statement. The print industry faced obvious headwinds, included an unbelievable 16 competing home and office printing brands, and had acquisition rumors swirling around a number of its key players. However, I did get a few of my predictions right and I’ll give myself partial credit for several others.

What I Got Right

Foxconn Acquires Sharp – A look at all the red-colored Sharp acquisition scenarios in my nifty consolidation matrix (above) and you can tell I was quite sure that Sharp was on its way to being acquired – it was just a matter of when and by who. Within a month, Foxconn had officially acquired a controlling stake in Sharp. As far as Sharp’s printing business is concerned, this seems to be a successful acquisition. Sharp was able to avoid all the messy stuff that comes with competitive M&A and has since leveraged its new financial stability to fund a number of channel acquisitions in the US and Europe.

Fujifilm Acquires XeroxFujifilm’s acquisition of Xerox still isn’t finalized, but it’s heading that way and it makes sense today for the same reasons it did in early 2016. Given Xerox’s steadily declining revenue, nearly complete reliance on print, and the various cost and operational challenges related to the FX/Xerox structure, Xerox’s path to long-term stability is more certain when part of Fujifilm. Icahn and Deason may be right about Fujifilm winning this deal, and successfully merging Xerox and Fuji Xerox will still be challenging (organizationally, geographically, and culturally), but it makes a lot of financial sense and at least right now it looks like it’s going to happen.

Where I Got Partial Credit

HP Acquires an A3 Player – I missed the mark on Sharp and Toshiba Tec, but HP clearly had its sights set on acquiring an A3 lineup and channel presence, and within seven months HP bought Samsung’s print business. HP’s much-touted A3 expansion would’ve had a much faster start if it acquired Sharp or Toshiba, but it would have cost much more than Samsung ($1.05B), and with this acquisition now complete, HP looks a lot more like a real A3 player than it did back in March 2016.

Lexmark Gets Acquired – It would have been really impressive if I forecasted that Lexmark would be acquired by a Chinese non-OEM toner company, wouldn’t it?  Unfortunately, I wasn’t even close, forecasting that one of the big A3 OEMs would be tempted enough by Lexmark’s strong A4 hardware portfolio and enterprise/vertical MPS competencies to beat the $3.6 billion that Apex offered.

Konica Minolta Buys an A4 ManufacturerKonica Minolta ended up acquiring Muratec, not Lexmark as I proposed. However, my reasoning wasn’t too far off, as both companies are A4-centric players with a strong OEM relationship with KM, and it turns out that both companies were for sale. In the end, it appears that Konica Minolta went with the lower-cost and lower-risk option, likely saving its acquisition money for targets outside of office hardware.

What I Got Wrong

No One Bought Toshiba Tec – Toshiba Corp. was certainly looking to sell non-core businesses, leading to the sale of its medical business and PC division (among others), but Toshiba Tec’s various MFP and POS assets weren’t enough to attract a buyer.

What’s Next

It’s been well over a year since I stepped away from the analyst side of gap, but even with my rusty analyst skills, I can safely say the print industry is headed to more consolidation.

Short term, it’s likely that most of the consolidation will continue to take place at the channel level, as larger dealers continue to snap up small- and mid-sized dealers and adjacent players (e.g. print software companies, non-OEM supply guys, office supply retailers) continue to merge.  

However, it’s certain that the future will bring more OEM acquisitions and consolidation. Looking at the OEM acquisitions that happened over the last two years, the manufacturers who are most likely to be acquired are those with small print businesses (e.g. Muratec), those who only rely on print for a small portion of their revenue (Samsung), OEMs facing financial difficulties (Sharp), or players who are completely reliant on print (Xerox).  

Most in the industry should be able to identify what remaining manufacturers fall into these categories, the only question is who’s buying and whether buying is even the best strategy.

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