Sunday, September 14, 2008

Gartner - RiKON

Gartner, Inc., the world’s leading information technology research and advisory company - speaks:

"This acquisition deal helps Ricoh fortify its formidable distribution channel. Expect a minimal near-term impact for most customers, but watch for Canon’s distribution partnership with IKON to end after the deal closes..."

Gartner agrees with my analysis(RiKon - "Really, I Knew One Name...") and adds a few little tidbits .

First off - Capacity-

It is Gartner's belief that:

"...if Canon drops IKON, Richo's manufacturing plant in Japan will have to boost capacity to make up the volume..."

I had not thought of this, but I agree. I do not think that the "up-tic" in production would pose too much of a problem for Ricoh - and what a nice problem to have.

I wonder how the Ricoh plant in Costa Measa, California will be affected. From an article in the Orange County Business Journal, by Sarah Tolkoff:

"...Its(Ricoh's) presence here is huge: Ricoh has more than 1.4 million square feet of industrial space spread among eight buildings in Irvine, Santa Ana and Tustin.

The local operation also has factories in Lawrenceville, Ga., and Toluca, Mexico.

Ricoh's name has been a fixture along the 55 freeway for more than 30 years. Proximity to the Port of Long Beach brought it here, said Jeff Briwick, executive vice president and group manager of Ricoh Electronics' corporate strategy group.

"Back then, product could flow from the parent company in Japan into the West Coast and then be deployed across the country to the East Coast," he said. "More than 35 years later, it still works mat way. Orange County is perfect from a supply chain and distribution perspective."

In Tustin, Ricoh has three buildings with about 475 workers.

One building doubles as the administrative headquarters for Ricoh Electronics and as a manufacturing plant for digital copiers.

In another building, Ricoh assembles chips onto circuit boards that go inside its all-in-one machines, which are built in the other Tustin building..."

So increasing output could be a good thing for Orange County.

Secondly -

Gartner's observation,

"...Based on Canon’s past reaction to similar deals with its channel partners, Gartner believes Canon will ultimately end its formal relationship with IKON, but will continue to support its products and abide by existing contracts until the deal closes..."

Pretty much a "no-brainer" here.

Looks like "business as usual" for now...


- Source Gartner.

IKON to cut 250 jobs: "Business as Usual"

Words From IKON's Espe - Internal IKON Memo

Ricoh to Buy IKON - Shot Heard Around the World

IKON/RICOH/CANON - Could there be a THIRD Shoe to Drop?

Gartner Report
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4 comments:

  1. For the last few weekends since the announcement of the deal, IKN stock has been trading near $17.50 in AfterHours trading. As we know, Ricoh offered $17.25/share, thus this means there are a number of investors that are willing to bet another offer (Perhaps Canon?) may appear on Monday morning (for more than $17.50). Wouldn't that be interesting!

    Keep an eye out for a Press Release Monday morning!

    Would you make that bet?!?!?

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  2. I ain't bettin nuttin...

    and nothing will surprise me...

    interesting...indeed.

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  3. Why else would someone be willing to pay $17.50/share today knowing that they are going to get $17.25 in return from Ricoh? This bidding up process has gone on for the last few weekends, and we all know Canon is sitting on approx $4 billion in liquid assets.

    Even on your posted Gartner report, they believe Canon would have to cut distribution through IKON...is that really a risk they can afford to take in a softening world economy?

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  4. Yes they can and Canon will survive! Ricoh/IKON will follow the Danka/Kodak debacle...

    ReplyDelete