Xerox will pay US$1.5 billion to acquire Global Imaging Systems, an office imaging equipment reseller that focuses on small and mid-sized businesses.
Xerox hopes to use the deal as a way to claim a larger share of the $16 billion market in the US for small-and-medium size business document handling, according to a statement from Anne Mulcahy, Xerox chairman and chief executive.
By making this deal, Xerox gains access to Global's 200,000 US customers and its 1400 sales representatives. And Global will finally begin to sell Xerox equipment. Until now, Global, of Tampa, Florida, has sold and serviced digital office equipment such as copiers, fax machines, printers and slide projectors built by suppliers including Konica Minolta Holdings, Canon, Sharp, Panasonic, Hewlett-Packard, IBM, Microsoft and Sony. That list of companies will now include Xerox.
When the deal is finalised, Xerox expects to employ all of Global's 4500 employees, including its president, Tom Johnson, and chief operating officer, Michael Shea. Xerox expects the acquisition to close in May, following approval by Global shareholders and US antitrust regulators.
The deal would be the company's third buyout in a year. Xerox paid $175 million for electronic discovery management firm Amici in July 2006, and paid $54 million for marketing software firm Xmpie in November.
Global posted revenue of $1.03 billion for fiscal 2005. For its quarter ending December 31, Global earned revenue of $277.5 million, generating profit of $17.5 million, both up at least eight percent from the same period last year.