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An Acquisition Frenzy

(June 2005) posted on Mon Jun 06, 2005

Three major market developments hit the graphic arts.

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By Gregory Sharpless

Between the May and June 2005 issues, two major transactions and one transaction-in-waiting made the news, all three of which could very well have an impact on your business: EFI's planned acquisition of Vutek; Scitex's announcement that it is looking to sell its shares of Scitex Vision; and Adobe's Macromedia buy.

EFI will acquire Vutek
One of the biggest change of hands to come down the wide-format pike in some time, EFI has signed an agreement to acquire VUTEk, Inc. for approximately $281 million in cash.

EFI is perhaps best known for its EFI Fiery RIP and server, and it has an array of printer OEMs as its customers (none of them direct competitors to Vutek). Beyond its core server and controller technology, EFI also produces proofing solutions (Best), print MIS solutions (Printcafe), and enterprise solutions for document and print management. It's no exaggeration to say EFI is better known on the commercial side of the market than the wide-format segment"?at least up to now.

This was a natural next step for EFI, says Guy Gecht, EFI's CEO. Vutek was the company's first choice when it came to which printer OEM to add to the EFI company roster, he says: "The superwide printing segment is a fast-growing segment of the graphic-arts market, and we had the privilege of looking over the market and talking to a lot of the large players. We knew we had some choices, but felt Vutek was the best acquisition to enter the market. It was the largest company in terms of revenue, plus its UV applications bring interesting advantages to our customers."

EFI, says Gecht, can bring to Vutek its software capabilities and provide financial stability, as well as market reach into the commercial side of the graphic market. In turn, he says, adding Vutek will help EFI expand what it can bring to those commercial customers: "We'll be able to help people find new ways of generating business for themselves, providing more services to their customers." In addition, he points out, EFI will benefit from Vutek's recurring revenue stream in ink and service (which make up about 40% of all Vutek revenues).