Xaar Plc, the UK-based inkjet printing technology firm, has blamed 1998 losses of 4.6m pounds on the economic crisis in the Far East. XaarÆs OEM customers had been focused in Japan, and the company says the Asian slow-down meant it failed to win a single new licensing deal in the whole year. Existing license holders deferred production of Xaar-based devices, adding to the companyÆs problems.
However, the company is now planning to acquire one of its OEM customers Modular Ink Technology, a Swedish inkjet printhead manufacturer. MIT is a subsidiary of Pelikan Holdings AG, itself a subsidiary of Nu-Kote International Inc which has recently filed Chapter 11 bankruptcy in the US. MIT has made significant losses for the last three years, but Xaar is confident its recent revenue growth can be built upon once its uncertain ownership is settled. The acquisition will be made for 3.4m pounds in cash and royalty forgiveness.
Xaar has also announced a 1.2m pound investment from its biggest customer, Olympus Optical of Japan. The investment is conditional on shareholder approval the MIT acquisition taking place, which is in turn reliant on approval from the US Bankruptcy Court. The deal will see Olympus pick up a 4.1% stake in Xaar, in newly issued shares.
