HP to buy remaining Indigo shares

Continuing its shopping spree this week, computing heavyweight Hewlett-Packard Co. said Thursday it will scoop up the remaining shares of a European printer maker that it first invested in more than a year ago.

Palo Alto, California-based HP will pay as much US$882 million in cash and stock for Indigo NV, a company that makes commercial and industrial digital color printing presses.

The acquisition comes with about 1,100 of Indigo's employees and an extensive portfolio of intellectual property for a printing technology called liquid electro-photography (LEP), HP said in a statement. LEP is used in commercial and industrial-grade printers as well as digital photo-finishing.

HP has been slowly dabbling in large digital color printing presses -- a market far removed from its core business of selling ink-jet and laser printers -- ever since it first invested in Indigo in September 2000. At the time, the companies agreed to cooperate in advancing technology for these presses.

HP at the time paid $100 million for 13.4 percent of Indigo -- acquiring 14.8 million shares of the company's common stock, according to Indigo. HP expects revenue from the acquired company to show up in its first year, fiscal 2002, which will end in October 2002.

Under the terms of the deal, HP will buy the remaining stake in Indigo for $629 million in HP stock and as much as $253 million in cash if Indigo can achieve its own long-term revenue goals.

The acquisition of Indigo follows just days after HP said it would pay $25 billion to buy Compaq Computer Corp.

Shares of Indigo (INDG) on Nasdaq gained $0.78, or 14 percent, on Thursday ahead of the announcement, and closed at $6.30. Shares of HP (HWP) on the New York Stock Exchange lost $0.51, or 2.80 percent, to close the trading day at $17.70.

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