Search This Blog

Friday, August 29, 2008

Espe, other top Ikon Office execs to get big retention bonuses

Friday August 29, 2008

"When Ricoh Co. Ltd. agreed to buy Ikon Office Solutions Inc. for $1.6 billion earlier this week, one thing that was clear was that Ikon management was going to stay on to run the big office equipment distribution business based in Malvern.

They have a million reasons to do so.

Under executive retention agreements, CEO Matthew J. Espe and five other senior executives would receive some hefty payments if they stay a full two years following the sealing of the deal.

The maximum Espe could receive is $8,630,400 over two years. He could stay as little as six months following the closing of the acquisition and get $1,294,560. The agreement is structured in a way that escalates payments the longer Espe stays. So $1,726,080 after 12 months, $2,157,600 after 18 months, and $3,452,160 after 24 months.

Retention bonuses are common in big deals like this, because often the last thing an acquirer wants is to be handed the keys and watch the top management wave good-bye.

According to a filing with the Securities and Exchange Commission, Ikon says these retention agreements replace severance pay the executives would have been entitled to receive. So they turned severance pay into incentive pay.

Here are the maximum payouts for other Ikon executives:

* Robert F. Woods, Ikon's chief financial officer, $2,122,375;

* Jeffrey Hickling, its senior vice president of operations,$1,850,625;

* David Mills, president of Ikon Europe, 906,144 pound sterling.

The retention agreements for Mark A. Hershey, Ikon's general counsel, and Mark Bottini, senior vice president of US field sales, were not attached to today's filing."
Click to email me.

Ricoh/IKON - Words from the Source on Why and How IKON will be "Integrated"

Comments made by Ricoh's President and CEO Shiro Kondo and CFO Zenji Miura regarding the acquisition.

I ran across an article from Tech-On, News - Straight from Asia written by Tomohiro Ootsuki, Nikkei Electronics.

Ricoh illustrates it's position on many aspects of the a IKON purchase - not one is surprising.

The text is derived from direct translation so I paraphrased a summary of the comments:

The purpose of the buyout -

-to strengthen the sales force in the North American market by assuming and penetrating IKON's Fortune 500 customers

-to reinforce the service business by realizing IKON's profits from its Professional Services and printing-related activities which currently accounts for 19% of the company's sales.

The reason for strengthening the service business -

Here's the direct quote:

"Ricoh has been providing merits to its customers through hardware. However, those merits are shrinking every year. In addition, customer needs are changing. They are now asking not only the useful functions of copy machines and multifunction copy machines but also advanced services such as the improvement of workflows and security.

One of the collateral evidences is the sales of our small-size multifunction copy machines that support A4 paper size. They are being used less widely than expected in developed countries, aside from emerging countries. We aim to deeply cultivate the markets in developed countries by the service business.

We will never give up the basic principle of manufacturing industry – making hardware with great care. On that premise, we want to be a company that provides software services. That's why we will put in resources to reinforce our service business"

My interpretation - Ricoh's customers and prospects are changing. IKON provides Ricoh with additional "merits". And Ricoh intends to expand services in the developed countries. Ricoh intends to utilize the PS assets of IKON to support hardware sales.

The relationship with Canon -

"Sixty percent of IKON's sales are coming from Canon Inc's products, and our products account for about 30% of the sales. We do not think that the percentage of Canon will continue to stay at that level, but we will try to keep it. For that purpose, we have to prevent IKON's top executives and customers from falling away."

Ricoh just killed most of Canon's US sales. And they are worried that executives and customers will leave IKON, but Ricoh will "try" to maintain Canon sales, top executives and customers - duh...

The earnings estimate -

"Our annual sales will increase by about ¥400 billion (US$3,669 million). In respect to the operating profit, we do not expect that IKON will turn a profit soon after it becomes part of the Ricoh Group because there will be an opportunity loss. But, for the future, we want to double IKON's operating profit posted in September 2007 to achieve an operating profit margin of 10%."

Yahoo! For those who stayed and didn't perform - you get a reprise. Expectations have just been lowered.

The integration plan -

"Though we will consolidate the back-offices (administrative departments), IKON and Ricoh Americas will continue to be independent companies. The sales figures and the number of employees of IKON are larger than those of Ricoh Americas.(see RiKon - "Really, I Knew One Name...")

We will work out an ideal structure of the companies while making consideration to IKON.

If it becomes clear in the future that it is more rational to integrate the sales and service networks of IKON and Ricoh America, we will do that."

For now, looks like business as usual. (see Words From IKON's Espe - Internal IKON Memo

The business environment for distributors -

"It is now at an inflexion point. These days, it is not easy to sell new models of copy machines and multifunction copy machines just by introducing them to the customers.

Even if a distributor has an edge over its competitors in certain geographical areas, it can lose orders because multinational companies prefer to call bids for copy machines to be used in their offices scattered around the world. So, we also have to become powerful system integrators.

Under those circumstances, independent distributors are planning new strategies, one of which is a sellout. Before our purchase of IKON, Xerox Corp bought Global Imaging Systems Inc and Konica Minolta Business Solutions USA Inc acquired Danka Office Imaging Co."

Ok, I have really no idea what is meant here, or more precisely, the above statement could mean dozens of things or nothing.

Other comments-

· "The press conference took place late at night in Japan to make the announcement in London, New Jersey and Tokyo at the same time.

· The buyout was proposed by IKON in about April 2008. At that time, Ricoh, just after finishing integrating information systems around the world in 2007, was about to go on an offensive.

· The amount of money sourced from external funds will be about ¥170 billion (approx US$1,559 million), equivalent to the amount paid for the acquisition, because the corporate bonds that we have already issued will soon mature."

Interesting that IKON approached in April(see Excerpts From Espe, July 27, 2008).

My Summary:
  1. Ricoh sees a great value in the PS and Service side of IKON to enhance their already superb manufacturing skills
  2. Ricoh will let IKON function as a separate entity - unless things go badly
  3. Ricoh knows the assimilation is huge
  4. IKON "shopped" themselves out
No surprises.

Other Words:

Ricoh to Buy IKON - Shot Heard Around the World

IKON "'re Stock is Rising..."

Canon Copier Profit Down 12%

Excerpts From Esp

Thursday, August 28, 2008

RiKon - "Really, I Knew One Name..."

August 27, 2008: The single largest day for this blog in terms of hits, reads and minutes on site.

I needed to take a little pause, a deep breath before writing anything of a personal nature. I think that I am somehow, uniquely positioned to add insight and reflection regarding the purchase by Ricoh of IKON.

First, an introduction: Today is August 27th, 2008 I just pulled up my resignation letter to IKON dated October 10, 2007 – it hasn’t even been a year. At that time, I knew I had left 8 months too late. The very next day, I felt relief. I will not go into all the reasons why I left – after nearly 4 years, it just wasn’t working out.

But while I was there, I met and worked with some of the most professional, caring and empathetic people in the industry. And while I was there, I worked with some of the most foolish, idiotic, numb-skulled people you would ever meet. Worse, were some of the most “over the top” procedural rules and protocols imaginable. For every sale, at least 35 “support” people needed to touch the order in some manner. For one order of mine, I tracked 62 people on one email string. We are talking a bureaucracy that rivals the Mexican or any other third world government.

While with IKON I coined the following phrases:

“On the first of the month, we all sell solutions, by the 22nd of the month, our managers convince us we move boxes.”

“For every Professional Service person I bring into the pre-selling process, I need to add 30 days to the sales cycle.”

“When the going gets tough, the management gets Micro.”

To the newly hired,
“Don’t bother telling me your last name, we aren’t going to get to know each other that well…”

While with IKON, I learned more about document management, software, and business. I enhanced my existing knowledge of how copiers and printers and software impact the business. I was given the freedom to learn all I could about each and every machine or delve into the most complex Document Management Software.

I carry not one ill feeling towards the company, and I have fond memories around the people I met and worked with there in Redlands. Don, Mike, Dawn, Karen, Katie, Monica, Nicole, Kim, Doug, Mark and all the rest…good times.

Also, I met some exceptional people from Ricoh. The Ricoh/IKON relationship was a great one, at least in SoCali, I can’t comment on anywhere else. You see, most of IKON’s business was Canon so Ricoh was always “second” – and they seemed to try a bit harder than anyone else. Ricoh spent money on IKON. Contests/Trips to Vegas, golf outings, dinners, client events – with Ricoh the answer was always, “yes, do you need more?” I do remember those times – Jerry and Frank.

---Onward ---

Ricoh Americas Corporation was established in 1961, boasts revenues of 2.8 billion yearly and utilizes Ricoh Business Solutions as the direct sales arm of Ricoh.

IKON had three basic “entities” - Hardware, Managed Services and Professional Services.

And at IKON, RBS was considered an opponent that will always be able to sell lower the us. An adversary who could provide excellent “transactional” service but being a little “thin” in areas of software expertise. The inside joke was, “RBS would win the deal, and use IKON to service the machines, because they didn’t have the coverage…”

Seriously, the main reason RBS ever won deals over IKON was price.

An RBS Sales Rep didn’t have a 15% “pack” lobbed on by corporate IKON.

Ok, let's see - Ricoh gets:

  • A channel of over 400 locations in North America and Europe, 24,000 employees, nearly 10,000 trained and certified technicians; certified on HP, Kyocera, Konica Minolta, Ricoh AND Canon.
  • Ricoh, will have a remanufacturing plant down in Mexico.
  • Ricoh just acquired a portfolio of On-Site Managed Services Clients. Lots with Canon gear.
  • Ricoh sliced away from Canon a additional, friendly supplies infrastructure on a Global scale.
The way I see it, the Biggest Goodies Ricoh gets are:
  1. Biggest Channel
  2. A huge list of old IKON Canon customers that are now Ricoh prospects
  3. A trained national and international service team
  4. A huge, proven, "box" oriented AND "solution" minded Sales Force
  5. But the big Gem in the deal is IKON's Professional Services team. These folks are highly trained in the art of software (relative to the industry). No other company has so many people trained and experienced in selling and implementing multiple document management software systems.
I mean, in the software realm, Xerox has Xerox specialists who only know and install Xerox - HP has external "partners", Konica Minolta has very little and is growing in this area. No other company has committed so much to so many different software partners. And when you look at what IKON has next to what RBS did not have, the difference is striking.

Fish Eats Fisherman -

IKON is more robust then RBS. And although Ricoh is plunking down the cash, the infrastructure, the value system and the sheer girth of IKON could overtake RBS in a heartbeat.
IKON did nothing wrong.

This dwarfs any and all previous acquisitions even the Xerox/Global “merger” and makes the Konica-Minolta-Danka deal look like folly. Indeed, this time next year, the IKON infrastructure may have completely engulfed RBS to such a level, that RBS exists in name only.

Make no mistake - this is a purchase, not a merger. Oh, and for current IKON employees, there could be a very silver lining.

Ricoh isn’t “rescuing” IKON. Aside from reducing management, and completing the implementing some internal software, IKON will not need to change all that much – the question is, can Ricoh handle this assimilation or will they develop a bad case of heartburn.

In 3 months, Ricoh will have the biggest and most trained selling force in the industry. And the transition for sales people could be the least painful of all.

What about the IKON employees?

As far as I am concerned, there is plenty to cut in the mid to upper management levels – but for Ricoh, the on the street, in the trenches, sales force is better trained then any out there and CAN be highly motivated when given proper vision and management. So, the selling staff has a great opportunity to lead the success of the amalgamation – if Ricoh is as smart as I think they are, they won’t get rid of too many sales people.

And as an IKON sales person, one day you will be competing head to head with…Canon. And who knows Canon better than an IKON rep?

A Canon rep, maybe?

Richard Berger, a spokesman in Tokyo for Canon, declined to comment on whether the company was in talks to buy Ikon or would submit a bid.

``We plan to accelerate our strategies that enhance our commitment to independent distributors,'' Berger said."

More likely, these new Ricoh Sales people will be going up against a small, independent, newly christened Canon dealer. The poor fellow won’t know what hit him.

So, no fear for the IKON selling professional – the people at IKON who should be shaking you their boots:
  • Executive Management
  • Upper management
  • Service Management
  • Sales Management
  • Administration
  • Order Processing
  • And anyone who upset Ricoh in the last 5 years by converting a Ricoh prospect into a Canon sale.
In the meantime

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

From Rueters -

"...Canon machines represent 60 percent of the products Ikon handles at the moment, with Ricoh machines accounting for 30 percent. But Ricoh said it aims to replace Canon products with its own printers and copiers in three to four years.

Analysts said the move could be a major blow for Canon in the world's largest office equipment market.

"Canon is now at risk of losing half of its copier sales in North America," UBS analyst Yoshitsugu Yamamoto wrote in a note to clients..."

Financial Times -

"...Canon has been hard-hit by consolidation within the US market for office equipment distribution, as competitors including Konica Minolta and Xerox have acquired key distributors and shaved down the network within which it can sell its products.

Shares of Ikon traded more than 9 per cent higher at mid-day on Wednesday at $16.99, below Ricoh’s $17.25 per share bid. The companies said Ricoh’s offer represeted a premium of one-third to Ikon’s average stock price over the past 60 days.

Bloomberg - Aug 28

"Canon lost 5.2 percent to close at 4,790 yen on the Tokyo Stock Exchange, the biggest decline since March 3. Ricoh added 2.9 percent to 1,777 yen, after gaining as much as 6.8 percent.

UBS AG said the acquisition may cause Canon's North America revenue to fall by as much as half, while Merrill Lynch & Co. estimates the company's overall sales would drop about 3 percent if it lost Ikon as a distributor. The purchase adds 400 sales locations for Ricoh in the U.S., Canada and Western Europe, markets that account for more than half of Canon's revenue.

``It is regrettable that Canon, which has over 450 billion yen ($4.1 billion) worth of treasury stock, chose not to acquire Ikon,'' Ryohei Takahashi, an analyst at Merrill in Tokyo with a ``buy'' rating on Tokyo-based Canon and Ricoh, wrote in a report yesterday. ``Canon looks set to lose market share.''

Richard Berger, a spokesman in Tokyo for Canon, declined to comment on whether the company was in talks to buy Ikon or would submit a bid.

``We plan to accelerate our strategies that enhance our commitment to independent distributors,'' Berger said."

And the list goes on...

As "surprising" as this little announcement was, can anyone really believe that Canon didn't know it was coming. I mean, I gotta believe that BOTH Canon and Ricoh were approached by IKON; Canon probably before Ricoh.

Canon is big and can take a hit - like the one Xerox doled out with the Global deal - but TWO thumps?

Do they really think that " enhance...commitment to independent distributors..." is really going to work?

You can't make this stuff up, and if Canon decides to bid against Ricoh, what fun that will be to watch this fall.

Yum yum, delicious...

Look, there's more:

MWB, Sharp, Global, Xerox - can we fit a customer into this phone booth too?

KonicaDankaIkonHP - Fallout?

Steel Partners - Dark Forces behind the IKON/Ricoh Deal

Lichtenstein Gets His Wish With Ikon Deal

Last year, Steel Partners offered IKON the opportunity to buy back all of Steele's IKON shares at a price of $17.25. At the time, IKON offered to buy the shares at $15/share, Steele declined and held on to IKON.

With yesterday's announced deal (Ricoh to Buy IKON - Shot Heard Around the World), Ricoh will purchase IKON for $17.25 per stock.

From the New York Times, Thursday August 28, 2008 -

"...The Philadelphia Inquirer noted that the activist investor’s hedge fund Steel Partners, which counts Ikon as one of its largest holdings, has been pressuring the company to boost shareholder value for some time now. Last year, Steel Partners urged Ikon to buy back share at a price of $17.25. The company declined, but offered $15 per share instead.

Steel Partners, however, decided to hang onto its holding and is now seeing its shares going for $17.25, under the terms of the deal with Japan’s Ricoh, which competes with Xerox, Canon and Konica Minolta Holdings in printers and copiers. The buyout price is a premium of 11 percent over Tuesday’s close of $15.56..."

Of course, IKON spokes-holes continue to say
that the deal was a result of the company’s “strategic planning process” and industry consolidation, and “had nothing to do with” the activist investor’s involvement.

One industry observer notes,
“This is all driven by Steel Partners. They’re one of the most aggressive hedge funds in the world,”

- Damien J. Park, owner of Philadelphia shareholder- management consultant Hedge Fund Solutions, told The Inquirer. Steel Partners owns about one-eighth of Ikon, and paid about $10.50 a share, for a $6.75-a-share profit.

Interesting backdrop -

November 21, 2007:
"...Ikon agreed in October to provide Steel Partners with confidential information in exchange for the New York fund's agreeing to not try to take over Ikon or its board of directors for six months. Steel said in November that it supported Ikon's $500 million buyback plan, which included a $295 million modified Dutch auction tender offer that Ikon completed in December..."
In exchange for the "confidential information" Steel Partners agreed ""to refrain from taking certain actions with respect to its investment in Ikon through May 2009, subject to completion of the pending repurchase plan."

Well, the "pending repurchase plan" was never completed.

March, 2008 -

"Ikon Office Solutions Inc. said Monday it no longer intends to repurchase $500 million of its stock in its 2008 fiscal year, which ends Sept. 30, and expects to end the year having bought back $340 million in shares. "We remain committed to completing our $500 million share repurchase program," Ikon Chairman, President and CEO Matthew J. Espe said. "However, in light of the challenging credit markets and the anticipated one-time cash and pre-tax charge ... we believe refinancing our existing debt would be significantly dilutive to our fiscal year 2008 results at this time."
The provider of copiers, related office equipment and document management services said the decision means its agreement with shareholder Steel Partners II LP probably will expire at the end of the month..."
...very interesting...

I posted this, last month:

Excerpts From Espe

Wednesday, August 27, 2008

Fallout - Ricoh Rises, Canon Falls

Ricoh Shares Advance on Purchase of Ikon; Canon Falls

Aug. 28 (Bloomberg) -- Ricoh Co., Japan's second-largest office-equipment maker, rose the most in more than five months in Tokyo trading on speculation acquiring Ikon Office Solutions Inc. will help the company take U.S. market share from Canon Inc.

Ricoh added 6.4 percent to 1,838 yen at 9:43 a.m. on the Tokyo Stock Exchange, the biggest gain since March 19. Canon lost 4.2 percent to 4,840 yen, losing the most since July 25.

"Ikon, Unisource have similar growth plans" - 1997

Has it really been 11 years?

I ran across this article today, "
Ikon, Unisource have similar growth plans" from the Philadelphia Business Journal - by Bob Brooke

"When Alco Standard Corp. of Valley Forge split in two to form Ikon Office Solutions Inc. and Unisource Worldwide Inc. on New Year's Eve, the move culminated a long-planned move to give its two main business units much needed freedom.

And in some respects, the spinoff can be seen as simply a civilized business transaction between two gentlemen -- Ikon Chief Executive Officer John Stuart and Ray Mundt, Unisource's CEO.

For years, the giant company, built on office copiers and paper, had been replicating itself through hundreds of acquisitions across the country. Alco began to take shape in the 1960s when Tinkham Veale, a wealthy Cleveland investor, assembled dozens of firms that included companies in fertilizer, machinery, electronics, coal and ice cream. In 1984, Alco sold off its manufacturing companies and focused on distribution, including its paper business, Paper Corporation of America. "

Stuart, having worked for Ricoh Corp., IBM and Royal Business Machines, joined the company in 1985 to restructure its office-products division...

The article is a trip. A trip down memory lane. This one line stumbled me up,

Levi & Korsinsky, LLP Investigates IKON Office Solutions

WOW. That was fast.Like we need to give lawyers more work -

NEW YORK, Aug 27, 2008 (GlobeNewswire via COMTEX) -- "Levi & Korsinsky announces an investigation on the proposed acquisition of IKON Office Solutions...
Levi & Korsinsky has expertise in prosecuting investor securities litigation and extensive experience in actions involving financial fraud and represents investors throughout the nation, concentrating its practice in securities and shareholder litigation. "


Sometimes, you don't need to hear a siren to know that somebody will be chasing ambulances.

Steel Group Rumored to Have "Forced" IKON Sale

From an article at

"...This is all driven by Steel Partners. They're one of the most aggressive hedge funds in the world, with $9 billion in assets under management," said Park. "They've been really public, and this is no real surprise," he added. "They're the largest shareholder. They own about 10 percent at a cost of about $10.51." Steel pushed Ikon last year to buy back shares at $17.50; Ikon balked, paying up to $15 in a limited buyback that boosted the company's debt."

And off of the author's blog -

As of June 30, 2008, Steel owned 12,456,300 shares at an average cost of $10.51/share.

Assuming the deal goes through, Steel will realize a hefty $84M gain on their four year investment.

Steel began pressuring IKN in June 2007 to do a $850M share buyback at $17.50/share. After Steel announced their intention to obtain board representation, IKN announced (in November 2007) a $500M buyback - which included a $295M dutch auction between $13 and $15/share and the balance to be purchased on the open market over the next year or so. As a result, Steel signed a standstill agreement and agreed not to seek board representation through 2009..."

My previous post on Steele:

IKON and Steel Partners - How IKON Will Be Sold

IKON, Ricoh - with the possibility of ANOTHER BIDDER?

there is an "undertone" out there - is there another bidder willing to go after IKON?

From, "...This acquisition continues a trend we have been seeing, in which office equipment makers have been acquiring distributors to strengthen their sales channels and product offerings. Ikon has 400 sales and services mainly in Europe and the U.S. Ricoh had recently acquired the European operations of copier service and supply company Danka Business Systems.

This is a solid offer in place, but we have added the shares of Ikon Office Solutions to our recommended list, as the possibility of another bidder jumping into the fray is a possibility. The company has a dividend yield of 1.03%, based on Tuesday's closing stock price of $15.56..."

In addition to this being the biggest move in the industry - ever - it could get even more delicious.

Words From IKON's Espe - Internal IKON Memo

Memo to the crew, from Espe...

"Today we announced the exciting news that IKON is to be acquired by Ricoh Company, Ltd., subject to the satisfaction of customary closing conditions. A copy of the press release we issued is attached for your information. As you know, Ricoh has been one of our valued equipment partners for many years and we are thrilled that we will now be joining forces with them to create a stronger global office solutions competitor.

Let me explain why we chose to take this important step. As our Board and management looked at the future of our company, we focused on how going forward we could best meet our customers’ needs, deliver value to our shareholders and create opportunities for our employees. We decided that, like many of our competitors, we would be better able to achieve these goals as part of a larger organization that was able to offer a full range of end-to-end office solutions and services to more customers across the globe.

We believe that as part of a combined company in the highly competitive and evolving office equipment industry, we can leverage our sales, service and marketing depth with Ricoh’s engineering and manufacturing expertise to better understand and more rapidly respond to the needs of our customers. In addition, we anticipate that this transaction will create new opportunities for our employees, as you will be working for a larger organization with enhanced growth prospects.

The unmatched expertise and strong skills of IKON’s people were a significant reason why Ricoh wanted to acquire IKON and they are very much looking forward to working with our team.

Following the completion of the transaction, Ricoh intends to operate IKON as an independent subsidiary and has no immediate plans to merge or consolidate the organizations or to make any changes as a result of this transaction. Of course, we will remain committed to serving all our customers and we have every intention of continuing to provide them with world-class service and support, regardless of the equipment they use.

While we are very excited about today’s news, it is important for you to know that it will take several months to complete this transaction. In the meantime, it will be business as usual for us. We anticipate that the transaction will close before the end of calendar year 2008. From now until then, it is critical that we all stay focused on selling, servicing and meeting the needs of our customers, and achieving our objectives to finish the fiscal year strong...

...I’d like to end by thanking you for your continued hard work and dedication to IKON. It is your contributions that have made our company an attractive partner for Ricoh and I am confident that if we all can continue to focus on what we do best, we will all have a very bright future to look forward to as part of the new Ricoh.


Here is the Press Release.

The Death of the Copier Dealer - Rise of the "Hybrid"

The Death of The Copier Sales Person

The Death of The Copier Dealer

Break Into Pharmaceutical Sales By Selling Copiers?

A Return to Selling

Ricoh to Buy IKON - Shot Heard Around the World

The other shoe has dropped.

In an announcement today, Ricoh stated that they have "reached a diffenative statement to purchase IKON through it's wholly owned U.S. distribution subsidiary, Ricoh Americas Corporation."

"IKON has terrific strength in areas that complement RICOH's growth strategy," said Shiro Kondo, President and CEO of Ricoh Company, Ltd. "IKON has advanced Professional Services capabilities with a long list of satisfied large customers. IKON is respected as well for its production print sales and service expertise. We are excited to add the very experienced IKON management team and the thousands of skilled and dedicated IKON employees to the RICOH family."

IKON Chairman and Chief Executive Officer, Matthew J. Espe, said, "Following an extensive review of our strategic opportunities, our Board conducted a formal process to evaluate alternatives for the Company, and has approved this attractive transaction for our shareholders, customers and employees. The offer represents a 33% premium over IKON's trailing 60-day average stock price as of market close on August 26th. In addition, combining with RICOH, one of the world's most respected and innovative companies, will enable us to strengthen our offerings to customers and create new opportunities for our employees."

Espe concluded, "We remain fully committed to providing the highest quality of support and service to all our customers."

WOW! This is BIG.

33% premium? Try $1.6 billion! That's it. Was it a fire sale?

A missed opportunity for HP. A bargain price for huge channel for copiers and printers - 14 billion they spend on EDS.

So now, one question answered and oh so many more are asked.

What about ALL of the IKON Canon customers? Will it be a feeding frenzy as competitors start picking away at Canon, Kyocera and Konica Minolta installs?

My oh my...

"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.

Canon Inc., the largest Japanese office equipment maker, has lost about 50 percent of its U.S. distribution network as the distributors have been bought by printer makers. 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.

``The biggest question is what Canon's response will be,'' said Cross. ``Does another bidder emerge?'' Canon spokeswoman Patricia Hall declined to comment.

Ikon, the largest U.S. distributor of Canon and Ricoh copiers, is being advised by Goldman, Sachs & Co., while Morgan Stanley is advising Ricoh." - Bloomberg

"Canon machines represent 60 percent of the products Ikon handles at the moment, with Ricoh machines accounting for 30 percent.

But Ricoh aims to replace Canon products with its own printers and copiers in three to four years, Chief Financial Officer Zenji Miura said."

Yikes - "another bidder"? This could get oh so much more interesting...

more to follow...

RICOH to Acquire IKON Office Solutions, Inc.

Ricoh in $1.6B deal for Ikon

My Older Posts:

Excerpts From Espe

I Know One Name - Canon

Should HP Purchase IKON's PS Division? - Delicious!!

IKON Introduces New Printer Line

Ricoh - A great, American Company? - Great ? yes, American? sorta...

Contact Me

Greg Walters, Incorporated