Thought I would share this with everone, I did not write it, and I'm not sure who does, however I tip my hat, its a fine compilation of the industry for the week!The following is a quick review of copier/MFP industry news from industry publications.
Finally succumbing to pressure from Warren Lichtenstein, IKON decided to sell out to Ricoh of Japan.
Details:
- Warren Lichtenstein runs Steel Partners II, a powerful group which controlled a large quantity of IKON stock, which has been demanding action from IKON CEO, Matt Espe.
- Mr. Lichtenstein, in June of last year, requested that either IKON buy back its stock for just over $17 per share, or that it sell the company for that amount.
- Mr. Espe initially starting buying back shares at $15, but then ended the program early due to market conditions.
- Steel Partners II owned 12,456,300 shares, and will now realize a $84 million gain on their 4 year investment.
- Purchase price of $1.62 billion or $17.25 per share.
- Stock was trading at $15.56 on 8/27/08.
- For now, Ricoh will allow IKON to run as a separate subsidiary, with IKON headquarters remaining in Malvern, Pennsylvaniao According to industry analysts, Canon moves anywhere from 40-60% of its products through IKON in U.S., Canada & Europe. Combined with loss of distribution through DANKA and Global, Canon’s stock is taking a beating.
- Canon reported its net profit was down 13% (Canon is still three times larger than Ricoh in total revenue), IKON also sold Hewlett Packard & Kyocera products.
- Canon has yet to comment publicly but it does have $4.1 billion worth of treasury stock it could spend on acquisitions.
- According to some industry analysts, Canon may consider allowing Hewlett Packard to relabel its entire product line to make up for lost IKON sales. This would mean trying to sell large MFPs primarily through computer dealer/VARs.· Currently, the largest Canon product that HP is allowed to relabel is a 40ppm color model (HP Color LaserJet 6040mfp)
- Ricoh claims that 30% of its product was sold through IKON.
- Ricoh CFO, Zenji Miura, was quoted as stating that Ricoh plans on “replacing all the Canon product in the IKON channel in next 3 to 4 years”, as IKON will obviously focus on selling Ricoh product.
- Ricoh CEO, Shiro Kondo stated: “purpose was to strengthen the sales force in North American market as IKON counts many of the Fortune 500 companies as its customers” “we do not expect that IKON will turn a profit soon after it becomes part of the Ricoh Group”, “for the future, we want to double IKON’s operating profit posted in September 2007 to achieve an operating margin of 10%”,“we will consolidate the back-offices”, “if it becomes clear in the future that it is more rational to integrate the sales and service networks of IKON and Ricoh Business Solutions, we will do that”
- Ricoh is reportedly going to borrow money to finance the acquisition.
- Ricoh has $22 billion in revenue and 83,400 employees.
- IKON currently has over 400 locations and over 25,000 employees, with total revenue last year of $4 billion. Over 10,000 of the employees are technicians.
- IKON, whose original name was Alco Standard, was created by the acquisition of 450 independent dealers, starting in the 1980s.
- Alco Standard was started by Tinkham Veale, a wealthy Cleveland investor, who purchased dozens of firms including fertilizer, machinery, electronics, coal and ice cream makers.
- In 1984, the company sold most of these companies off, and focused on copier dealers and paper makers.
- In 1997, Alco spun off paper division as Unisource Worldwide, and renamed itself IKON.
- IKON stood for “I Know One Name” as the company hoped to provide copiers, printers and computer networks. Later, the computer network division was sold off. (pundits say IKON stands for “I know only numbers”)
MORE ON RICOH BUYING IKON
- IKON’s headquarters in Malvern, PA employs 500.
- Former CEO was John Stuart, who came to IKON from Ricoh in 1985, but left when growth plans did not meet target.
- Current CEO, Matt Espe, came to IKON 6 years ago from General Electric, where he ran the lightbulb division.
- In a letter to IKON employees, Matt Espe explained the reasons for the sale:· “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”
- Law firm Levi & Korsinsky, LLP announced it has launched an investigation into this acquisition of IKON, due to shareholder concerns.
- In January, IKON dumped 350 employees to cut costs after profit fell 45%§ Sales fell for 11 straight periods prior to sale.
- IKON is being advised by Goldman, Sachs & Co., while Ricoh is advised by Morgan Stanley.
- The acquisition must meet approval of U.S. and European antitrust legislation.
- Standard & Poor and Moody investor services are considering downgrading the lending status of Ricoh, as the company now has 111 billion yen of debt maturing in 2011.
- Ricoh is offering retention bonuses to top IKON execs:
- Matt Espe, CEO may receive up to $8,630,400.
- Robert Woods, CRO, up to $2,122,375.
- Jeff Hickling, Senior VP, up to $1,850,625.
- David Mills, President Europe, up to 906,114 pound sterling.
According to Gartner, Ricoh sold 16.5% of all copiers sold in the U.S. last year, while Canon sold 10.3%.
Xerox announced that it is the official office equipment provider for both political party conventions in the U.S.
The Wabash County board is reviewing a decision to spend $9000 of a Homeland Security Department grant to buy a used color copier for the Wabash County Health Department. According the spokesperson, Lester Templin, the cost per copy for color will be 65 cents
InfoTrends estimates that there are 1.7 million color pages printed via TransPromo applications, and will grow 22.8 billion. TransPromo, or transactional promotion documents, usually comprise a full color marketing message on an invoice or statement mailing to customers, printed on a production print color system.
Lexmark announced free software which is claims will reduce the amount of printing in the workplace:
A free toolbar for either Microsoft Internet Explorer or Mozilla Firefox browerso one click to convert full color web page into black and whiteo automatically eliminate logos and graphics.
History of DANKA trivia ;
- Started in Tampa, FL by Dan Doyle and Frank McPeak in 1977o Named formed by combining first names of both founders.
- In 1997, DANKA grows to $3 billion by buying copier division of Kodak for $588 milliono 10/98, Dan Doyle resigns as CEOo 2004.
- DANKA sells its Canadian subsidiary to Pitney Boweso 2005,,
- DANKA sells South and Central American business to Toshibao 2006.
- DANKA sells its European business to Ricoh for $210 milliono 2008, sells to Konica Minolta for $240 million.
Silverbrook Research announces a delay in launching its revolutionary color inkjet technology. The company, which had previously announced that its MEMJET technology would rival that of laser printers, is now hoping to launch a product by end of 2009. It had originally announced it plans to launch a desktop photo printer, but due to image quality issues, it will now focus on a desktop A4 model. It will print letter-size only, have top speed of 60ppm, and sell for $399. Unknown which consumer electronics vendor will actually market it. While the technology was invented by Kia Silverbrook, the launch will be coordinated by Bill McGlynn, a former Hewlett Packard executive.
A website named fixyourownprinter.com is detailing ways to get more life out of toner cartridges made by Hewlett Packard and Brother. The author claims that the companies have rigged their cartridges to state they are empty and force end users to buy new ones, even though there is still toner left.
Canon won a bid to supply the University of North Carolina-Pembroke with an imagePRESS C7000VP production color system.
In an effort to cut costs, Citicapital announced to its employees, that they are no longer allowed to print in color any internal documents. The connected color copiers and printers are to be used to print customer presentations only.
Hewlett Packard announced a new print controller, called the SmartStream Workflow, for its Indigo 7000 production color system:o top speed of 120ppm, max duty cycle of 3.5 million per montho 812x812dpi with 8 bits per pixel.
Samsung of Korea getting sued. The law firm of Kabateck Brown Kellner, LLP filed suit in U.S. District Court of Trenton, New Jersey for fraud. The law firm claims to have evidence that Samsung laser printers are rigged to shut down and request a new toner cartridge even though there is still ample toner left in cartridge. The suit is asking for $350 million in damages.
Fuji Xerox (Kanagawa / Japan; http://www.fujixerox.com/) has developed a biomass plastic containing more than 50% by weight of plant-derived materials for use in mechanical components in interior moving sections of its printing and copying machines. The company began introducing...need to read more?
News came in an email to me that RISO just laid off David Murphy (VP Marketing), Don Michelucci (VP, Direct) and others in the Direct Division. I was told it was a reduction in workforce.
