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 user 2007-06-07 at 3:08:00 pm Views: 36
  • #18060

    IBM and Ricoh’s joint venture company begins operations
    Solutions Co. (IPS), the joint venture printing company announced
    earlier this year by IBM and Ricoh, has begun operations with 1,200
    employees around the world.

    company was formerly IBM’s Printing Systems Division. With the closing
    of the agreement, Ricoh now owns 51 percent of the joint venture and
    will progressively acquire the remaining 49 percent over the next three
    years as the joint venture becomes a fully owned subsidiary. IBM
    received $725 million at closing.InfoPrint Solutions Co. has operations
    in Argentina, Australia, Brazil, Canada, China, France, Germany, Hong
    Kong, Italy, Japan, Mexico, Peru, Singapore, Spain, Switzerland,
    Taiwan, the U.K. and the U.S., and has plans to expand to other
    countries in the third quarter of this year, subject to the completion
    of local information and consultation processes.The joint venture,
    based on IBM’s printing operations which generated approximately $1
    billion of revenue in 2006, will continue to benefit from access to
    IBM’s powerful worldwide distribution and sales network. IBM client
    teams, business partners and dealers will continue to offer InfoPrint
    printing and output solutions, and InfoPrint Solutions Company will be
    IBM’s preferred global print solutions provider. The InfoPrint product
    brand and IBM’s extensive printer development capabilities are also
    part of the joint venture.

    IBM will provide maintenance services
    to InfoPrint Solutions Company for one year under a services agreement,
    after which more than 1,000 IBM printer maintenance specialists may
    join the new company, subject to local business conditions and
    completion of local information and consultation processes.”With this
    launch, we have created a billion-dollar enterprise with the backing of
    two undisputed industry leaders, IBM and Ricoh. Together, we will drive
    the next generation of innovation in output solutions,” said Tony
    Romero, CEO and President, InfoPrint Solutions Company. “Our plans for
    the joint venture include greater investment in research and
    development, enhancing our professional services capabilities, and
    increasing the size of our sales and support organization. Our intense
    focus on strategic output management means our current and future
    customers will benefit from a new level of products, services, and
    solutions built to address their business needs.”InfoPrint Solutions
    Company, launching with 40 years in the printing industry and more than
    20 years of joint innovation and development between IBM and Ricoh,
    offers output solutions for general office, industrial, enterprise and
    commercial printing environments for customers of all sizes – from
    small businesses to large enterprises. The investment from Ricoh will
    increase the company’s portfolio with new product and solutions
    offerings in both the production and general office markets.

    is an historic moment both for IBM and Ricoh and more importantly, an
    industry first. The creation of InfoPrint Solutions Co. brings together
    the best of two industry leaders, and greatly enhances the Ricoh
    portfolio of offerings,” said Norio Tanaka, Corporate Senior Vice
    President of the Production Printing Business Group at Ricoh Company
    Ltd. “This unique combination puts IPS ahead of its competitors and
    positions the company to lead the market by focusing on the goal of
    creating true operating efficiencies and value for customers.”Since the
    initial agreement in January 2007, new and existing customers have
    demonstrated their commitment to the joint venture across industries.
    Today, InfoPrint Solutions Co. also announced a major customer
    engagement with 21st Century Insurance Group, a leading insurance
    company based in the U.S.Said Jim Chalker, Director of IT at 21st
    Century Insurance Group: “Working with a company that has the
    entrepreneurial drive of a start-up yet the support and global backing
    of two market leaders has meant great things for us as a customer.
    InfoPrint Solutions Co. is helping us reduce output costs and increase
    efficiency, meaning we can pass these savings on to our own most
    important asset – our customers.”

    IBM received $725 million in
    cash at the closing. The cash received was consideration for the
    initial 51 percent acquisition of the joint venture by Ricoh as well as
    a prepayment for the remaining 49 percent to be acquired and certain
    royalties and services to be provided by IBM to InfoPrint Solutions
    Company. Final consideration for this transaction will be determined at
    the end of the three-year period based upon the participation in the
    profits and losses recorded by the equity partners. As a result of the
    transaction, IBM expects to record a second quarter pre-tax gain of
    approximately $80 million and a total pre-tax gain of approximately
    $250 million over the three-year period. Both gain amounts are pending
    final valuation of the agreements signed with the joint venture as well
    as final determination of transaction related expenses. Further details
    will be included in IBM’s second quarter earnings report and Form 10-Q