Monday, November 16, 2009

Canon to Buy Océ, Biggest Printer Maker in Europe



Interesting...

How in the world does something like this happen? Pennies on the dollar or Euro, I guess.

The press release reads as though Canon is "...driven by the undeniable fact that scale is increasingly important..."

I guess sized DOES matter.

Get ready for more - numbers are down for all, times are tough, perhaps this is the beginning of a consolidation avalanche.

Press Release:


Full press release content here. New York Times article, here.

Canon intends to acquire all ordinary shares of Océ through an all cash public offer

Canon and Océ aim to create the overall No. 1 presence in the printing industry;
Combination to capitalize on excellent complementary fit in product range, channel mix, R&D, and business lines resulting in an outstanding client offer;
Strong strategic rationale for Canon and Océ - growing and building on proven track record in innovation and client servicing;

Canon intends to make an offer of € 8.60 per Share (cum dividend) for 100% of the outstanding Shares of Océ, representing a premium of 70% over Océ's closing share price of Friday 13 November 2009 and 137% to the average share price over the last 12 months;

The Management and Supervisory Boards of Océ fully and unanimously support and will recommend the intended Offer;

Holders of the depository receipts for Océ's cumulative preference shares, Ducatus, ASR and ING (approximately 19% of the total share capital), agreed to sell their interests to Canon; large shareholder Bestinver Gestion S.A. (approximately 9.5% of outstanding Shares) has provided an irrevocable undertaking to tender;
Océ remains separate legal entity as a Canon division, headquartered in Venlo (the Netherlands); Océ brand is to be maintained and applied in all relevant markets. Océ to lead its R&D and manufacturing. Management Board and key management remains in place;

Employees part of industry leader - existing labor agreements will be respected, no redundancies as a result of the Offer.

TOKYO, November 16, 2009—Canon and Océ today announced that they have reached conditional agreement to combine their printing activities through a fully self-funded, public cash offer by Canon for all the Shares of Océ. The offer price of € 8.60 per Share of Océ (the "Offer") represents a premium of 70% over the closing share price of Friday 13 November 2009 and 137% to the average closing price of Océ's Shares over the last 12 months. The Offer values 100% of the issued and outstanding Shares of Océ at approximately € 730 million.

Canon and Océ aim to create the overall No. 1 presence in the printing industry, building on an enhanced scale and a combined history of innovation and excellent client servicing. The combination will capitalize on an excellent complementary fit in product mix, channel mix, R&D, and business lines resulting in an outstanding client offer spanning the entire printing industry.

Canon's President and COO Tsuneji Uchida says:

"We are delighted to welcome Océ, the ideal partner in every respect, into the Canon Group. Through the merger of Canon and Océ, we believe that we will be able to realize clear benefits, not only in the area of R&D, but also in terms of product mix and marketing and are confident that this winning combination will contribute greatly to our goal of becoming the overall No. 1 presence in the printing industry."

Océ's CEO Rokus van Iperen says:

"I am very much looking forward to joining forces with Canon. There is a great fit between our companies, which share similar values and a strong commitment to technology and innovation. I am proud Canon intends to team up with Océ, based upon the prominence of our customers and technology and of course our people that have shaped our company for generations.

This is the best possible combination in the consolidating global printing industry and will deliver scale in R&D, manufacturing and distribution. The combined organization provides us with access to a huge sales network in Asia as well as mutual cross selling opportunities in Europe and the United States. Our customers will benefit from an outstanding product and services offering and our employees will be offered appealing development opportunities."

Social aspects

The Océ employees will become part of a global leader in the printing industry which will capitalize on the strong brands of both companies. Océ and Canon do not expect that there shall be any material negative consequences as a result of the Offer for the existing employment level of Océ, excluding already announced personnel reductions. The combination will respect the existing rights of the employees of Océ, including applicable covenants with the Océ works councils and the unions, the applicable social plans and collective labor agreements. The combination will also respect the current obligations with respect to the pension rights of Océ's employees.

Financial highlights of the Offer

Canon intends to acquire all the outstanding Shares of Océ through a fully self-funded cash offer consisting of € 8.60 in cash per ordinary Océ Share, representing:

a 70 % premium over Océ closing price on Friday 13 November 2009;
a 137 % premium over Océ's average twelve months share price.
No further dividends are expected to be declared prior to the completion of this Offer.

Strategic rationale

Canon and Océ will be able to build upon each other's strong history and proven track record of innovation and customers servicing and create a strong joint enterprise capable of long term successes. The similar technology oriented background and corporate values will be important drivers creating the world's leading group in the printing industry.

Canon and Océ have similar backgrounds in corporate values with a client oriented culture and a technology driven business model. Océ, one of the world's leading providers of document management and printing for professionals, brings to the merger its expertise and strengths in the areas of production printing, wide format printing and business services. Océ's strategy focuses on strengthening its distribution power, increasing product competitiveness and improving operational excellence. The combination will provide Océ access to Canon's well-established sales and marketing network throughout Asia. Additionally, Océ will benefit from the Canon Group Best in Class processes and infrastructure as well as financing to facilitate active investment toward the expansion of Océ's business operations. The combination of Canon and Océ will have leading positions in the SOHO (Small Office/Home Office), office, production and wide format segments, offering a superlative range of products and services. It would be able to provide optimal customer servicing through its enhanced scale, innovative technologies and strong distribution networks. Océ and Canon have complementary technologies and products and would benefit from improved diversification across regions and businesses.

Under Phase III of its Excellent Global Corporation Plan, launched in 2006, Canon aims to join the ranks of the world's top 100 companies in terms of all key measures of business performance. As a principal strategy toward the realization of this goal, Canon aims to achieve the overwhelming No. 1 position worldwide in all of its current core businesses. Océ boasts a robust direct sales and service network in 32 countries, which will provide valuable additional sales and service support for Canon-brand products. Furthermore Canon will benefit from the addition of Océ's production and wide format printing line-up, along with the R&D synergies made possible through joint development initiatives in these areas.

The printing industry currently is in a period of consolidation, driven by the undeniable fact that scale is increasingly important, especially in R&D and manufacturing. Only players that are able to improve profitability through increased scale and Best in Class processes and infrastructure will play a leading role in the printing industry going forward. In this perspective, Canon and Océ form the ideal combination. Together they are excellently positioned to optimize the servicing of their customers and become the undisputed market leader.




Reactions:

4 comments:

  1. Océ has a #1 position in wideformat and #1 VHV bw+clr continuesfeed (financial transaction, book on demand and publishing) segments. In A4 bw Oce ships the world fastest printsystem (>300 ppm). In Europe and US Oce adds a lot of Managed Document Services experience to the Canon portfolio.

    So it seems that Canon is building a very strong #1 position in all output segments.

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  2. I think an underrated aspect of the potential acquisition by Canon is that it's self-funded making it clear that even with reduced revenues from a down economy Canon still has a tremendous amount of cash on hand. To purchase IKON Ricoh had to use a mixture of internal and external funding. It will be interesting to see where Canon goes next--- the HP and Oce' moves are pretty indicative that they're not going to go down without a fight.

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  3. Oce real passion is to be an emerging output technology firm. However with too litte outlets. The partnership with KM did not counter this issue.

    With the Canon deal Oce Technologies will be able outperform the sales channel for their technology and increasing hardware sales and service revenue by real numbers:

    Very High Volume, continues feed:
    - Océ JetStream, Océ ColorStream 10000 and Océ ColorStream 9400.

    Wideformat:
    Océ ColorWave 600

    Document Production (Cutsheet):
    VarioPrint 6000 Ultra (up to 314 ppm)

    Unfortunally their seven color technology failed. But the technology knowledge is in place.

    Services
    Oce Business Services has shown a steady grow over last 10 years and is ready to expand together with Canon Managed Document Services

    Graphical Industry
    Oce has build a strong position in the commercial market offering real competition to Xerox and Kodak. Ricoh is not a real player in this segment due lack of products and experience.

    Supplies
    As Oce has propriety CopyPress technology, all the supplies is comming from Oce. No competion!

    R&D
    With Oce Canon sells a huge and experienced technology center in Europe.

    Canon just released the new ImageRunner Advance platform for office and crd.

    Conclussion: Up2date self-owned technology in all segments, ready to sell and services revenue. and a experienced professional business services organization. Canon does what it is selling!

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  4. As a Canon channel partner, We are very excited to see this partnership!

    ReplyDelete