Cambridgeshire-based industrial inkjet printhead manufacturer Xaar has announced a deal with Seiko Instruments that will involve a £20 million cash payment to Xaar over the next six months.

Japanese headquartered Seiko Instruments Inc (SII) will upgrade its existing licensing arrangement along with replacing future royalty obligations for JPY2.98 billion, equating to around £20 million at current exchange rates, paid in two tranches by the end of the first half of financial year June 2018.

Seiko supplies inkjet systems for an array of uses including the textiles, ceramics and building markets, along with wide-format graphics, coding and marking. The company was established in 1937 and has been a long-term Xaar client.

Shares in Xaar were up 1.7% at 386.50p mid-December.