Best of Both Worlds: EFI and AGFA Form Distribution Agreement to Fill Printer Gaps

EFI has been an industry leader in roll-to-roll wide-format inkjet printer offerings, but lacked a high-end hybrid system in its product lineup. Similarly, AGFA has been a frontrunner with its high-end Jeti Tauro hybrid LED UV systems, but lacked a 5-meter roll-to-roll LED UV printer. So, rather than both companies devoting considerable time and R&D expenditures to develop their own systems to fill the gaps in their respective inkjet printer portfolios, they decided a strategic global partnership made the most sense from an economic, tactical, and speed-to-market standpoint.

That was the main message presented during a co-hosted industry trade press event, held last Wednesday at EFI's Londonderry, New Hampshire, facility.

The EFI/AGFA collaboration will debut on the global stage at the FESPA trade fair in Amsterdam, the Netherlands, where each company will showcase the new offerings in their respective booths. The printers will be rebranded by each organization, and post-sales service and support will remain, as will options for EFI Fiery and AGFA Asanti front-end offerings.

“We are thrilled to be partnering with EFI," Arnaud Calleja, VP, Digital Printing Solutions, at AGFA, noted. "By integrating their roll-to-roll platform into our sign & display offerings, we are poised to deliver an exceptionally diverse product range. At the same time, we can both maintain a dedicated focus on product innovation within our respective specialized domains, ensuring our technologies remain at the forefront of digital print transformation.”

EFI COO Scott Schinlever added the partnership is really about filling up some of those gaps. "Even though the display [market] has a lot of growth left, it still is maturing," he said. "What becomes more and more important over time is how you are serving your customers and partnering with them in their business journey." Schinlever added that EFI was getting feedback from clients who were seeking high-end hybrid solutions from EFI. "At the end, it's about serving our customers who are very loyal to us."

Addressing some of the implications of the new partnership announcement between two competitors, Vincent Wille, president, Digital Print & Chemicals, at AGFA, pointed out the new supply agreement should not imply that the two companies are uniting into one. "This is a very strategic supply agreement. There is a gap in our portfolio and one in EFI's portfolio," he explained. "Does that mean we may be able to collaborate on other topics — maybe yes — but this is not at all a merger, nor an acquisition."

The plan going forward is also that AGFA and EFI will not call on each other's customers and prospects when it comes to these printer offerings. "The competition that was there in the past is the competition that will be there in the future," Wille confirmed. "Customers will still see two different companies, each one now with a more complete portfolio."

Commentary: With today's tight margins, and the high costs and long lead times for product development, this OEM agreement makes a lot of sense for both companies. It makes them more competitive in the equipment segments where they were formerly lacking, enabling them to compete more effectively with other industry providers to fulfill the complete requirements of their respective customer bases. It also creates the potential to partner for better field service and support infrastructures — an area where all printing industry manufacturers are struggling due to shortages of skilled field service technicians.

Nevertheless, one can speculate that this strategic partnership may mark the beginning of even greater collaboration between the two organizations on multiple fronts. And it might be the first baby step for a potential merger or acquisition down the road, which could be feasible and logical, despite the prospect of an M&A transaction facing possible antitrust and shareholder roadblocks. As to the answer for that possibility, only time will tell.