In case you guys were unaware, yesterday (12/11/03) GE Capital bought Ikon's leasing division. Should be interesting to see what this holds in store...... Weeeeeeee!
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Associated Press
GE Acquires IKON's Leasing Business
Thursday December 11, 4:33 pm ET
IKON's Stock Surges After GE Acquires the Company's Equipment Leasing Business for $1.5 Billion
FAIRFIELD, Conn. (AP) -- Shares of IKON Office Solutions surged 20 percent Thursday after General Electric Co. agreed to acquire its equipment leasing business for $1.5 billion.
IKON will sell selected assets to GE Vendor Financial Services, a Danbury-based unit of GE Commercial Finance that provides financing to equipment manufacturers and has $26 billion in assets.
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GE and IKON also will enter into an agreement for the funding and servicing of IKON's future leases and rental contracts in the U.S. and Canada.
No job cuts are expected. IOS Capital LLC, IKON's wholly owned leasing subsidiary that is based in Macon, Ga., has approximately 400 employees, the companies said.
The deal is expected to close in the first quarter of 2004.
Valley Forge, Pa.-based IKON, which had revenue of $4.7 billion in fiscal 2003, distributes copier and printing technology designed to help businesses manage documents efficiently and provides lease financing through its subsidiaries, including IOS Capital.
Shares of Ikon gained $1.75 to close at $10.55 on the New York Stock Exchange, where GE shares rose 68 cents to close at $30.40.
GE Acquires IKON's Leasing Business
Thursday December 11, 4:33 pm ET
IKON's Stock Surges After GE Acquires the Company's Equipment Leasing Business for $1.5 Billion
FAIRFIELD, Conn. (AP) -- Shares of IKON Office Solutions surged 20 percent Thursday after General Electric Co. agreed to acquire its equipment leasing business for $1.5 billion.
IKON will sell selected assets to GE Vendor Financial Services, a Danbury-based unit of GE Commercial Finance that provides financing to equipment manufacturers and has $26 billion in assets.
ADVERTISEMENT
GE and IKON also will enter into an agreement for the funding and servicing of IKON's future leases and rental contracts in the U.S. and Canada.
No job cuts are expected. IOS Capital LLC, IKON's wholly owned leasing subsidiary that is based in Macon, Ga., has approximately 400 employees, the companies said.
The deal is expected to close in the first quarter of 2004.
Valley Forge, Pa.-based IKON, which had revenue of $4.7 billion in fiscal 2003, distributes copier and printing technology designed to help businesses manage documents efficiently and provides lease financing through its subsidiaries, including IOS Capital.
Shares of Ikon gained $1.75 to close at $10.55 on the New York Stock Exchange, where GE shares rose 68 cents to close at $30.40.
Reuters
Ikon Shares Soar on $1.5 Billion GE Deal
Thursday December 11, 2:31 pm ET
BOSTON (Reuters) - Shares of Ikon Office Solutions Inc. (NYSE:IKN - News), surged 26 percent on Thursday after a unit of General Electric Co. (NYSE:GE - News) agreed to buy a piece of Ikon's equipment leasing business for $1.5 billion.
Ikon Chief Executive Matthew Espe turned to a familiar face to further restructure his company's balance sheet. Espe joined Ikon, the world's largest independent distributor of copiers and printers, last year after running GE's lighting business.
Ikon, based in Valley Forge, Pennsylvania, said the deal represents a transition out of the leasing business in the United States and Canada.
The agreement calls for Ikon to transfer about $1.9 billion worth of assets to GE Vendor Financial Services, including a $1.8 billion leasing portfolio, the companies said. GE Vendor Financial holds about $26 billion in assets.
Gross proceeds to Ikon will total $1.5 billion, the office equipment supplier said.
Ikon also agreed to transfer its Macon, Georgia-based IOS Capital facilities, systems and about 400 employees to GE (NYSE:GE - News) under the agreement, which carries an initial term of five years.
Ikon would retain about $1.4 billion in net lease receivables, although GE would service that portfolio.
GE will service and provide funding for Ikon's future U.S. and Canadian lease originations and rental contracts as a result of the pact.
'STRONG EARNINGS CONTRIBUTION'
"This alliance will provide a strong earnings contribution with steady cash flows," Espe said in a statement.
Ikon distributes office machines from industry heavyweights, including Canon, Ricoh and Hewlett-Packard Co. Its revenue for fiscal 2003 totaled $4.7 billion.
In October, Ikon said it had reduced non-finance subsidiary debt to $430 million, a more than 50 percent reduction from June 2001 levels. Espe joined Ikon after GE combined its appliance and lighting businesses.
Ikon said it would now target reducing its debt-to-capital ratio to between 30 percent and 35 percent, and it intends to negotiate a replacement or amendment to its $300 million credit facility.
Under a profit-sharing arrangement, Ikon will receive a fee on all new lease originations provided to GE Vendor Financial Services for five years, with a three- or five-year renewal option.
The companies said that during the initial five-year term Ikon will also receive a monthly volume fee for providing services related to generating leases, but those fees will not exceed $253 million.
Lehman Bros. was Ikon's financial adviser on the transaction, which the companies hope to close in the first quarter of next year.
Ikon's shares gained $2.29 to $11.09 Thursday afternoon on the New York Stock Exchange (News - Websites) , surpassing their one-year high of $9.45 set in June.
Shares of GE, based in Fairfield, Connecticut, added 1.8 percent, or 54 cents, to $30.26, also on the NYSE.
Ikon Shares Soar on $1.5 Billion GE Deal
Thursday December 11, 2:31 pm ET
BOSTON (Reuters) - Shares of Ikon Office Solutions Inc. (NYSE:IKN - News), surged 26 percent on Thursday after a unit of General Electric Co. (NYSE:GE - News) agreed to buy a piece of Ikon's equipment leasing business for $1.5 billion.
Ikon Chief Executive Matthew Espe turned to a familiar face to further restructure his company's balance sheet. Espe joined Ikon, the world's largest independent distributor of copiers and printers, last year after running GE's lighting business.
Ikon, based in Valley Forge, Pennsylvania, said the deal represents a transition out of the leasing business in the United States and Canada.
The agreement calls for Ikon to transfer about $1.9 billion worth of assets to GE Vendor Financial Services, including a $1.8 billion leasing portfolio, the companies said. GE Vendor Financial holds about $26 billion in assets.
Gross proceeds to Ikon will total $1.5 billion, the office equipment supplier said.
Ikon also agreed to transfer its Macon, Georgia-based IOS Capital facilities, systems and about 400 employees to GE (NYSE:GE - News) under the agreement, which carries an initial term of five years.
Ikon would retain about $1.4 billion in net lease receivables, although GE would service that portfolio.
GE will service and provide funding for Ikon's future U.S. and Canadian lease originations and rental contracts as a result of the pact.
'STRONG EARNINGS CONTRIBUTION'
"This alliance will provide a strong earnings contribution with steady cash flows," Espe said in a statement.
Ikon distributes office machines from industry heavyweights, including Canon, Ricoh and Hewlett-Packard Co. Its revenue for fiscal 2003 totaled $4.7 billion.
In October, Ikon said it had reduced non-finance subsidiary debt to $430 million, a more than 50 percent reduction from June 2001 levels. Espe joined Ikon after GE combined its appliance and lighting businesses.
Ikon said it would now target reducing its debt-to-capital ratio to between 30 percent and 35 percent, and it intends to negotiate a replacement or amendment to its $300 million credit facility.
Under a profit-sharing arrangement, Ikon will receive a fee on all new lease originations provided to GE Vendor Financial Services for five years, with a three- or five-year renewal option.
The companies said that during the initial five-year term Ikon will also receive a monthly volume fee for providing services related to generating leases, but those fees will not exceed $253 million.
Lehman Bros. was Ikon's financial adviser on the transaction, which the companies hope to close in the first quarter of next year.
Ikon's shares gained $2.29 to $11.09 Thursday afternoon on the New York Stock Exchange (News - Websites) , surpassing their one-year high of $9.45 set in June.
Shares of GE, based in Fairfield, Connecticut, added 1.8 percent, or 54 cents, to $30.26, also on the NYSE.