Xaar Plc, a Cambridge, UK-based company which holds the patents on an exciting new ink jet printing technology, is to raise around 10m pounds (net) via a 20m pounds private placing. The funds will be used to push Xaar’s piezo ceramic wafer printing heads into new application areas such as consumer goods packaging and printing onto textiles, as well as for further research and development into wider and faster print heads. Preliminary listing particulars have now been published and the placing should value Xaar at over 60m pounds. The firm is currently 75% owned by venture capitalists including 3i Plc and Prelude Technology, and half of the 20m pounds placing will be used to reduce these equity interests. Although profitable in 94 and 95, the company made losses of 0.5m pounds in 1996, increasing to 1.1m pounds in the first half of 1997. Until now, Xaar has been dependant upon licensing other companies to use its technology. Eight licenses have been sold to date, including sales to Xerox Corp and Brother International Corp, both of whom currently manufacture printers using Xaar print heads. But no new license sales have been made this year, hence the interim losses. Xaar’s print heads work on a drop on demand ink jet system. Tiny droplets of approximately 5 peco-liters are fired onto the printed surface by micro-pumps at a rate of up to 100,000 drops per second.
Depending upon the type of ink used, the system is capable of printing onto paper, plastic, textiles and even metal. The print heads currently have between 100 and 1,000 of these tiny pumps in a horizontal array, and the end result is a color image of almost photographic quality. But unlike rival thermal ink jet technologies from Hewlett Packard Co and Canon Inc, Xaar’s print heads use non-aqueous inks, developed in conjunction with Zeneca, which the company claims will preclude the paper wrinkling (or cockling) experienced with water-based inks. But the Achilles heal, as with most current ink jet printers, is the tediously slow rate at which full color images can be printed. The Brother MC3000, which utilises a 256 nozzle Xaar print head, takes a full 3 minutes 30 seconds to print a single page. Following this round of financing, Xaar wants to invest in its own clean room manufacturing facility to make better and wider print heads. The longer term goal is for a print head wide enough to produce an A4 page in a single sweep, giving Xaar access to printing speeds which are fast enough to compete in the office networked printer market, currently dominated by the laser printer. Ultimately, the company wants speeds of around 120 pages per minute, aimed at a short run digital printing press for low volume items like brochures and company accounts. The peripheral electronics and mechanical systems making up the bulk of the printers will be left to others, but Xaar wants to make and sell its own printing head technology, giving it the opportunity to lock customers into long term, recurring and highly lucrative deals for specialist inks. And a brief look at the accounts for HP’s printer division will tell you that this is where all the real money is to be made. Dealing in the shares is expected to begin on October 17.