FedEx Corp.'s plan to purchase copy center operator Kinko's Inc. for $2.4 billion in cash will strengthen FedEx's contact with business customers, company executives said yesterday.
FedEx, Memphis, TN, said it will acquire the company by purchasing the 75 percent stake in Kinko's owned by Clayton Dubilier & Rice Inc., a private equity firm. The deal is to close in first-quarter 2004.
“The FedEx and Kinko's combination will substantially increase our retail presence worldwide and will enable both companies to take advantage of growth opportunities in the fast-moving digital economy,” FedEx CEO Frederick Smith said in a statement.
FedEx has served as Kinko's exclusive shipping provider since 1988, and it has 134 full-service counters at Kinko's locations. The deal will expand these services to all 1,200 Kinko's stores.
Jointly, FedEx and Kinko's say they will extend the services they offer to small, medium and large businesses — their core customers.
“This combination will give customers large and small a single 'go-to' resource for a wider range of business needs,” said T. Michael Glenn, FedEx executive vice president of market development and corporate communications.
Kinko's plans to expand from its 110 international locations, focusing on growth opportunities in Asia, North America and Europe. FedEx, which serves 215 countries, will support Kinko's expansion.
The acquisition also is seen as a response to United Parcel Service's purchase of Mail Boxes Etc. in 2001, according to reports. UPS began rebranding the more than 3,000 Mail Boxes Etc. locations to the UPS Store in April.
The Kinko's management team is expected to remain in place, and company headquarters will stay in Dallas.
Kinko's employs more than 20,000 people and estimates about $2 billion in revenue for the year ending Dec. 31. FedEx's annual revenue totals about $23 billion.