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http://www.bloomberg.com/apps/news?pid=20601101&sid=aHreHVI.d1U4&refer=japan
Ricoh to Buy Ikon Office Solutions for $1.62 Billion
Aug. 08- Ricoh Co., Japan’s second-largest
maker of office machines, agreed to buy equipment distributor
Ikon Office Solutions Inc. for $1.62 billion in cash to expand
its sales and services operations in the U.S.Ricoh offered to pay $17.25 a share, Malvern, Pennsylvania-
based Ikon said in a statement today. That’s an 11 percent
premium over Ikon’s closing price of $15.56 yesterday and the
largest acquisition for the Japanese company.The deal adds Ikon’s 400 sales locations in the U.S., Canada
and Western Europe to Ricoh’s primarily Japan-based business. The
Asian nation accounted for 46 percent of Ricoh’s revenue of 2.22
trillion yen ($20.2 billion) last year. The acquisition takes the
last independent printer distributor in North America off the
market after Global Imaging Systems Inc. and the U.S. unit of Danka
Business Systems Plc were bought in the last 18 months.“It’s a reasonable price,” said Shannon Cross, an analyst
with Cross Research in Livingston, New Jersey. She rates Ikon a
“buy.” “Ricoh gets an expanded U.S. distribution network.
There’s not another asset like it anymore.”Ikon got 87 percent of its 2007 sales of $4.17 billion from
North America. The deal is expected to close in the fourth
quarter and will be financed with a mix of internal and external
funding, Tokyo-based Ricoh said.Ikon rose $1.46, or 9.4 percent, to $17.02 at 4:04 p.m. in
New York Stock Exchange composite trading, the biggest
percentage increase since April 10. Ricoh fell 1.6 percent to
1,727 yen on the Tokyo Stock Exchange.Canon’s Move?
Ikon has faced shareholder pressure to sell the company or
recapitalize the shares to change its stock structure and boost
value to investors. Ikon eliminated about 350 jobs in January to
trim costs after first-quarter profit fell 45 percent. The
company has also reduced executive bonuses as sales fell for 11
straight periods through the third quarter of 2007.About 25 percent of Ricoh’s machines are sold through Ikon,
compared with as much as 40 percent for Canon Inc., the largest
Japanese office equipment maker, Cross said. Canon has lost
about 50 percent of its U.S. sales network as the distributors
have been bought by printer makers.“The biggest question is what Canon’s response will be,”
said Cross. “Does another bidder emerge?” Canon spokeswoman
Patricia Hall declined to comment.“We feel that this is good for Ikon shareholders and good
for Ricoh shareholders,” said Ricoh spokesman Ron Potesky.
“We’re not concerned with what someone else may or may not
do.”Xerox Corp. bought Global Imaging Systems for $1.67 billion
last May to expand its small- and mid-sized business sales.
Konica Minolta Holdings Inc. bought London-based Danka’s U.S.
unit for $240 million in June.Ikon, the largest U.S. distributor of Canon and Ricoh
copiers, is being advised by Goldman, Sachs & Co., while Morgan
Stanley is advising Ricoh.
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