XEROX TO ACQUIRE GLOBAL IMAGING FOR $1.5B

[Anonymous]

Xerox To Acquire Global Imaging Systems For $1.5B
Apr. 
2007 Xerox dropped the hammer on a major acquisition Monday with a $1.5
billion cash deal to buy Global Imaging Systems, a Tampa, Fla.-based
integrator and reseller of Ricoh, Konica Minolta and Sharp products.The
Stamford, Conn.-based document technology giant will pay $29 per share
for Global Imaging and expects the deal to close in May.For Xerox, the
deal helps further its effort to grow sales to small and midsize
businesses and represents a significant coup in that it’s taking over a
large company that has partnered with some of its key rivals.In a
conference call with financial analysts to announce the deal, Xerox
Chairman and CEO Anne Mulcahy said she believed the acquisition would
create no overlap between Xerox and its channel partners.Xerox in
February launched a major initiative to align itself with a greater
portion of the channel, instituting a new program for solution
providers and resellers and committing itself to spending more on
partners. Mulcahy said that since the Global Imaging deal is focused on
growing Xerox’s sales in the SMB space, where the company has not been
strong, she does not see potential for great channel conflict.”What we
did [with the new channel initiative] was announce our intent to
participate a lot more aggressively in the SMB market,” Mulcahy told
analysts. “Part of that was adding tools and incentives for agents;
part of it was expanding our reach with resellers as well as our
product line. We think it’s very consistent with that. When you haven’t
participated in 80 percent of the decisions [in the SMB space], quite
frankly, there’s not a ton of overlap.”In its most recent annual report
on file with the U.S. Securities and Exchange Commission, Global
Imaging, which has about 200,000 customers, said that as part of its
business, “we purchased approximately 20 percent, 19 percent and 11
percent of our equipment, parts and supplies from Ricoh and its family
of products, Konica Minolta and Sharp, respectively.”After the Xerox
deal closes, Global Imaging will become an independent unit of Xerox
and begin to add key parts of Xerox’s product line, including its
Phaser group of office products, into its lineup, the companies
said.”Xerox is now positioned to compete and win in more of those [SMB]
buying decisions,” Mulcahy said.Other Xerox executives are expected to
provide more details about the deal later on Monday. 

[Author]

April 2, 2007 at 10:22 AM