Sunday, April 21, 2013

Does Brother Corporation Have it's Sights Set for Another Acquisition?

I was stunned when I read the report that Brother Corporation has signed an agreement to purchase certain assets of their document imaging division. The purchase agreement is to include document scanners. image capture software and technical services.  The price, mere 210 million US dollars. I wasn't stunned by the sale because I had heard and read that Kodak was shopping the document imaging business for quite sometime. The stunned part was that Brother Corporation was the buyer.

What were Ricoh, Kyocera, Xerox, Canon, Toshiba and KonicaMinolta thinking? Recently I had an opportunity to provide 20-30 production scanners to a large firm with over 3,000 employees. I was in with Fujitsu and had Kodak as the competition. I knew that Kodak was shopping the business and made sure I the prospect knew.

When you think about what types of companies need high production scanners you can only think that they would be some of the largest companies in the world.  For $210 million you would have access to the Kodak portfolio of existing accounts.  Mind you,  I don't know the accounts but I can assume that there would be some juicy opportunities for MFP's, Production Systems, Managed IT, Managed Services, and more! Wouldn't it make sense that one of the above companies would have pulled the trigger for the Kodak Document Imaging Division?

One of the first thoughts that came to mind was the fiasco back in 1996 when Danka bought the sales, marketing, and equipment service operations of Kodak's office copier division.  In 1997 we started to hear the stories coming from the Kodak camp about the clash of the sales cultures.  The Kodak purchase for $558 million almost pushed Danka into bankruptcy in 1999.

Last year Brother Corporation garnered 497 billion yen in net sales, compared to Ricoh with 1,903 billion yen in net sales.  An interesting piece of information I read when researching Brother is that Kyocera Corporation is the sixth largest shareholder

Personally, I have some fond memories of Brother.  Back in the mid eighties to early nineties when I owned my own dealership we were a Brother Dealer for word processors, typewriters, fax machines and we even purchased the first color copier that Brother developed to sell color copies in our town. 

When I think of Brother I think of them as a major player with SOHO (small office home office) MFP's, faxes and printers.  What would be the benefit of them buying Kodak's Document Imaging Division? I was able to find out that Brother's Mid-Term business strategy included Network Imaging Device Business unit where Brother will focus on the document application business. Brother also indicated that these new businesses will be promptly established and made commercially viable through proactive M&A (Mergers and Acquisitions) and alliances. Seems like Brother has taken a first step in the Acquisition of Kodak's Document Imaging Division. 

Thus all of this leads me to this question, "Does Brother have it's sights set for another acquisition"?  Would I dare to think that Brother may be interested in Sharp's Copier Division?  Just thinking out loud here. It will be interesting to see how Brother moves forward with the integration of Kodak's Imaging Division and what the future holds.

=-=Good Selling=-


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