IBM, Ricoh in joint printing deal
IBM is selling its printing systems business to global digital office services company Ricoh in a deal that initially calls for the creation of a joint venture. During the next three years, however, the new printing systems business will evolve into a fully owned Ricoh subsidiary.
The joint venture is called InfoPrint Solutions Co. and is based on IBM's Printing Systems division. Ricoh will initially acquire 51 percent of the joint venture and will progressively acquire the remaining 49 percent over the next three years. IBM, Armonk, NY, will receive $725 million in cash for the deal.
The deal is an extension of IBM and Ricoh's strategic partnership, which extends back 20 years. The new company will combine IBM's more than 40 years of enterprise printing experience with Ricoh's office solutions experience in an attempt to become a leading provider of output solutions for small businesses and large enterprises.
The eventual transfer of the IBM Printing Systems division to Ricoh, Tokyo, Japan, will enable IBM to focus on strategic businesses. For Ricoh, it provides entry into the print solutions arena. IBM's printing business generated approximately $1 billion of revenue in 2006.
"This agreement is key to Ricoh's efforts to become a leading global provider of output and print solutions," said Masamitsu Sakurai, president/CEO of Ricoh, in a statement.
InfoPrint Solutions Company's worldwide headquarters will be located in Boulder, CO, currently the headquarters of the IBM Printing Systems division. Tony Romero, the general manager of IBM Printing Systems will head the new company as president/CEO.
The company is expected to begin operations with about 1,200 employees. IBM will continue to provide maintenance services to InfoPrint clients under a service agreement.