The domino effect of British technology companies being bought by deep-pocketed foreign buyers has claimed one of Cambridge’s oldest hardware specialists.
The board of Domino Printing Sciences, which develops and makes industrial printing technology, has recommended a 915p-a-share cash offer from Brother Industries, a Japanese maker of printers and karaoke machines, that values the British business at £1 billion.
Shares in Domino soared by 30 per cent, or 220p, to a record high of 941p last night amid investor hopes of a counter-offer to a bid that represents a 27 per cent premium to the stock’s closing price on March 10.
Domino joins several of its Cambridge neighbours in falling into the hands of an overseas company. CSR, the chip maker, was acquired by Qualcomm, the American maker of mobile chips, for £1.5 billion last October; Hewlett-Packard took over Autonomy, the software business, for $11.7 billion in October 2011.
Other British companies that have fallen into foreign hands in recent years include Logica, the IT consultancy, bought by CGI, of Canada; ICL, the computer group taken over by Fujitsu, of Japan; and Psion, the handheld computer maker, bought by Motorola, the American giant.
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Brother, founded more than a century ago as a sewing machine repair company, entered the British market in 1968 when it bought the Jones Sewing Machine factory. It plans to retain the Domino brand and management team as it pushes into industrial printing.
Domino is the largest of a cluster of inkjet technology companies that operate in Cambridge and compete with larger American rivals, such as Danaher and Dover Corporation, both of which are understood to have run the rule over the Cambridge business.
Domino specialises in printing barcodes and use-by dates on a variety of products and has expanded into digitally printed labels, where it has found it tough to compete with larger companies such as Epson, Xerox and Konica Minolta. Domino prints codes on everything from bingo tickets to eggs and has been a big beneficiary of laws that require more information to be included on products for consumers
It is not the first time that a Japanese company has acquired a printing business in Cambridge. Dainippon Screen Manufacturing paid £30 million for Inca Digital in 2005 to tap into the city’s technical knowhow.
However, the mood in Cambridge was largely positive yesterday, with hopes that Domino would go from strength-to-strength under the ownership of Brother. “The Japanese parent will recognise there is a strong base here and they will want to build on it. There is little downside and lots of upside,” Guy Newcombe, chief executive of Archipelago Technology, a rival Cambridge inkjet company, said.
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Peter Byrom, the chairman of Domino, said the sale was necessary to maintain the company’s global presence. Domino issued a profit warning last June after it complained of aggressive price competition from both Dover and Danaher in Asia. The business employs 2,300 people and Brother said that it did not intend to change the main locations of its operations.
Citi advised Brother on the deal; Rothschild and Jefferies acted for Domino.
Land of the rising sums
British companies sold to Japan
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2015 Brother buys Domino Printing of Cambridge for £1 billion; Nikon pays £251 million for Optos, a Scottish retina imaging company
2014 Rakuten buys DC Storm, a Brighton marketing company for $100 million; Sony buys CSC Media for £107 million
2013 Suntory buys GlaxoSmithKline’s Lucozade and Ribena drink brands for £1.35 billion
2012 Dentsu buys Aegis, the advertising company, for £3.2 billion; Hitachi pays £696 million for Horizon Nuclear; NTT DoCoMo buys the app company Buongiorno for €209 million, acquiring UK’s iTouch with it
2011 Itochu buys Kwik-Fit, the mechanics chain, for £637 million
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2010 NTT DoCoMo pays £2.2 billion for Dimension Data 2007 Sumitomo Chemical buys Cambridge Display for $285 million