03.16.15
Brother Industries Ltd. has agreed to buy Domino Printing Sciences for 1.03 billion pounds ($1.6 billion) in cash to expand in labels and packaging as the home and office printing market declines.
Shareholders of Cambridge, UK-based Domino will receive 915 pence per share, or a 27% premium to the stock’s last closing price in London, the company said in a statement. Domino’s directors plan to recommend that shareholders accept the offer, which would value the company at about 15.4 times earnings before some items. The shares jumped 31% to 947.5 pence.
“It’s a defensive move, mainly as home printer demand is falling in line with the increasing use of smart devices,” said Amir Anvarzadeh, a manager of Japanese equity sales at BGC Partners Inc. in Singapore. “A move toward industrial printers could be a move to try to capture more business in commercial print services.”
Brother Industries, based in Nagoya, Japan, is seeking to diversify from office equipment such as laser and inkjet printers. The agreement follows Japanese companies including Canon Inc., Japan Post Holdings Co. and Itochu Corp., which led more than $28 billion of purchases this year through February, the fastest start on record for Japanese acquirers, according to data compiled by Bloomberg going back to at least 2006.
Brother was attracted by Domino’s label and package printing business. “The markets in which Domino competes are evolving, with the increasing adoption of digital printing technology, and attracting a new breed of competitor with significantly greater scale and financial firepower than Domino,” says Domino Chairman Peter Byrom.
Founded in 1908 as a maker of sewing machines, Brother Industries focused on that sector for more than 50 years before expanding into business machines and tools in 1961, according to the company’s website. Since then it has expanded into printers, typewriters and an online karaoke system.
Shareholders of Cambridge, UK-based Domino will receive 915 pence per share, or a 27% premium to the stock’s last closing price in London, the company said in a statement. Domino’s directors plan to recommend that shareholders accept the offer, which would value the company at about 15.4 times earnings before some items. The shares jumped 31% to 947.5 pence.
“It’s a defensive move, mainly as home printer demand is falling in line with the increasing use of smart devices,” said Amir Anvarzadeh, a manager of Japanese equity sales at BGC Partners Inc. in Singapore. “A move toward industrial printers could be a move to try to capture more business in commercial print services.”
Brother Industries, based in Nagoya, Japan, is seeking to diversify from office equipment such as laser and inkjet printers. The agreement follows Japanese companies including Canon Inc., Japan Post Holdings Co. and Itochu Corp., which led more than $28 billion of purchases this year through February, the fastest start on record for Japanese acquirers, according to data compiled by Bloomberg going back to at least 2006.
Brother was attracted by Domino’s label and package printing business. “The markets in which Domino competes are evolving, with the increasing adoption of digital printing technology, and attracting a new breed of competitor with significantly greater scale and financial firepower than Domino,” says Domino Chairman Peter Byrom.
Founded in 1908 as a maker of sewing machines, Brother Industries focused on that sector for more than 50 years before expanding into business machines and tools in 1961, according to the company’s website. Since then it has expanded into printers, typewriters and an online karaoke system.