Friday, April 11, 2008

More On The Konica Minolta Danka thing...

From the press release -Danka Business Systems PLC Signs Agreement With Konica Minolta to Sell U.S. Business Operations

Published by Webmaster at 9:48 pm under Konica Minolta, News

Business Systems Office Imaging Company ("ST. PETERSBURG, FL, Apr 08, 2008 (MARKET WIRE via COMTEX News Network) — DankaPLC (Danka) (OTCBB: DANKY) (LSE: DNK.L), a leading supplier of office imaging equipment and support services in the United States, today announced it has signed a definitive agreement with Konica Minolta Business Solutions U.S.A., Inc. ("Konica Minolta"), to acquire the company’s wholly-owned U.S. subsidiary, DankaDOIC"), through which Danka conducts its business operations.

"In addition to continuing support for the entire Danka customer base with a complete range of products and service capabilities," said A.D. Frazier, Chairman and Chief Executive Officer of Danka, "I am pleased to say the new organization will also provide the added benefit of direct access to Konica Minolta’s world-class technology, distinctive product offerings and financial strength. Customer relationships will grow ever stronger as a result."

Frazier credits Danka employees for accomplishing a remarkable competitive transformation. "They redefined the manner in which document workflow solutions are managed and serviced in small-to-medium sized enterprises and in the extremely competitive high volume production print marketplace. Their success, achieved against a backdrop of having to overcome the company’s daunting corporate legacy issues, translates to new relevancy and value for the Danka approach."

Frazier added, "Nevertheless, the costs associated with trying to remain an independent player in an extremely competitive industry are imposing. This transaction represents, by far, the best outcome for Danka’s organization and staff. It preserves the DOIC organization, allowing us to serve our loyal customers while addressing the holding company’s burdensome financial obligations. We are confident that Konica Minolta’s stated desire to invest in, and grow, DOIC’s business will be rewarded in the customer marketplace."

The acquisition by Konica Minolta is designed to build and expand upon the foundation established by DOIC. "Konica Minolta’s acquisition of DOIC will further enhance our leadership in the color and high volume production print markets while complementing our overall growth strategy with our independent dealers and branch network," said Jun Haraguchi, President and CEO of Konica Minolta Business Solutions U.S.A., Inc. "We’re excited about the prospects that this strategic acquisition will create, and believe the combined strength of the new organization will be beneficial to our customers, the DOIC customer base and the DOIC employee family."...

Edgeline -

When Xerox bought Global, it didn't take long for both Canon and Ricoh to pull out of the Global channel, leaving lots of locations with no support.

Canon, Kodak, Toshiba and Edgeline all appear on the front of the Danka equipment page. I would imagine that HP would love to remain on that page. Will Konica continue the relationship?

Konica Minolta's color Biz-Hubs are in the same space as the 8050/60 - we are replacing Xerox and K/M with Edgeline's all the time.

I wonder how the sales staff at the "new" Danka will respond. Everyone knows sales people are lazy and take the path of
least resistance. (I sell for a living) And if presented with prospect interested in 50ppm color, will it not be easier to direct that interest into a Konica sale over the "new and unproven" Edgeline?

Or how about learning a completely new technology to sell AND support vs selling the "zero-graphic" process as "proven" and "reliable"?

No matter what the corporate line may be, this does not bode well for the only national distribution channel for
Edgeline. Danka presented little value in the first place and now that value has been reduced even more.

But wait, maybe it is good for Edgeline - Perhaps a headline like,

"Konica Minolta buys DANKA for $240 Million - Adds Edgeline to Product Mix"

"In a stunning move, Konica Minolta and HP and announced a "partnership in understanding" opening all of Konica Minolta's existing and newer dealers access to the new CM8050/60 with Edgline technology..."

Very interesting times.




Reactions:

2 comments:

  1. I would be very surprised to see Danka pick up the Edgeline product. More often than not when a manufacturer comes to power over a distribution channel, HP drops the distributor (like Canon and Ricoh do). It may be a little different than what happened with the Global buyout by Xerox because in that case Xerox had a competing product line.

    We'll see. It will be interesting to watch.

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  2. I agree - it is unlikely that KM will keep the HP line.

    But they may to see if HP pulls out first.

    Time will tell.

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