Cambridge UK inkjet printing technology business Xaar plc has made a key acquisition in the US that could stack up to $18.5 million.

It has bought Engineered Printing Solutions in Vermont, a leading provider of product printing equipment in North America – the first acquisition in Xaar’s strategic vision to achieve £220 million of annual sales by 2020.

EPS has built a successful business through supplying customised and bespoke printing solutions to a wide variety of market sectors including promotional, packaging, medical, automotive, apparel, appliances, sports equipment and toys. One of its focuses has been to develop flexible and cost effective digital inkjet solutions.

EPS employs 60 people. In 2015 it generated a five per cent operating profit margin on $14m of revenue. Initial consideration for the acquisition is $11m with deferred consideration of $7.5m based on revenue and profit performance over a three-year period.

Xaar CEO Doug Edwards said: “The product printing market is served by multiple print processes today and the fastest growing is inkjet. “Here, just as with other industry sectors, there is great potential to accelerate the adoption of inkjet. EPS has established a successful business and is well positioned to continue to grow.

“Xaar gains a strong customer base and footprint in North America, a region we have been targeting for growth. The integration capabilities EPS brings to Xaar will enable us to provide greater support to our existing and new OEM partners.”

Julian Joffe, who founded EPS in 1985 and who becomes Xaar’s new president of Engineered Printing Solutions, said: “Engineered Printing Solutions has a long track record of success through providing both analogue and digital inkjet solutions to its customers. Xaar values our brand, engineering capability and the innovative solutions we bring to the marketplace.

“Xaar brings deep knowledge of inkjet technology and access to wider channels. We are looking forward to working together to better serve our global and US customers and accelerate the growth of the business.”

In another significant transatlantic deal, Essex-based Synthomer plc – a FTSE 250 chemicals business formerly known as Yule Catto & Co – has completed the acquisition of American-owned HEXION Performance Adhesives & Coatings.

Hexion PAC’s business in China – representing approximately one per cent of the parent’s revenues – is subject to a deferred completion expected in Q3 2016.

The total consideration of $226 million (£157 million) has been funded from both existing cash resources and utilisation of additional credit facilities. The consideration was hedged at the time of the initial announcement on March 21 at an FX rate of £1:$1.44.

The acquisition significantly strengthens Synthomer’s position in the performance adhesives and coatings market, offering access to new product technologies, customers and markets.