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Ricoh to purchase IKON Office Solutions

NealNealDocusultant Elite P4P'er
RICOH TO ACQUIRE IKON OFFICE SOLUTIONS, INC.

Tokyo, August 27, 2008 — Ricoh Company, Ltd. (TSE: 7752, “RICOH”)(President & CEO: Shiro Kondo) today announced that it has reached a definitive agreement with IKON Office Solutions, Inc. (NYSE: IKN, “IKON”) to acquire IKON (the “Transaction”) through RICOH’s wholly owned U.S. distribution subsidiary, Ricoh Americas Corporation ("RAC"). The Transaction is supported by both RICOH and IKON and has been approved by the Boards of Directors of the respective organizations.
1. Background

RICOH (headquartered in Tokyo, Japan) is a global leader in imaging solutions that has brought to the market innovations such as digitalization, network solutions, and colorization. In the rapidly growing printing and document solution areas, RICOH’s challenge has been to strengthen its channels for assessing customers’ potential needs and making appropriate proposals based on a customer-driven approach. In the extremely competitive U.S. market, Ricoh is committed to further strengthening its sales and support channels.

As the world’s largest independent channel for document management systems and services, IKON (headquartered in Malvern, Pennsylvania) supplies and services a wide range of office equipment, such as MFPs (multi-function printers), fax machines and printers, in the U.S., Canada and the Western European markets. With over 400 sales and service locations, IKON has a long track record with Fortune 500 companies among its customers. RICOH has been a key supplier to IKON, and the relationship between the two companies has a long history. In addition, IKON also provides professional services and document outsourcing services to a wide variety of customers.

"IKON has terrific strength in areas that complement Ricoh's growth strategy," said Shiro Kondo, President and CEO of Ricoh Company, Ltd. "IKON has advanced Professional Services capabilities with a long list of satisfied large customers. IKON is respected as well for its production print sales and service expertise. We are excited to add the very experienced IKON management team and the thousands of skilled and dedicated IKON employees to the Ricoh family."

IKON Chairman and Chief Executive Officer, Matthew J. Espe, said, “Following an extensive review of our strategic opportunities, our Board conducted a formal process to evaluate alternatives for the Company, and has approved this attractive transaction for our shareholders, customers and employees. The offer represents a 33% premium over IKON's trailing 60-day average stock price as of market close on August 26th. In addition, combining with Ricoh, one of the world’s most respected and innovative companies, will enable us to strengthen our offerings to customers and create new opportunities for our employees.”

Espe concluded, "We remain fully committed to providing the highest quality of support and service to all our customers."

As a result of the Transaction, RICOH will strengthen its business infrastructure in the U.S., Canada and Europe by combining with IKON’s strong sales and service network. RICOH also will gain access to IKON’s customer base, which includes major account customers and government and public sectors in the U.S. This acquisition is yet another step in RICOH’s integrated global growth strategy.

2. Acquisition Price:

Target: IKON Office Solutions, Inc. (See Appendix) Estimated Acquisition Price: U.S. $1.617 billion (approx. JPY 172.1 billion) *1 based on an offer of $17.25 per share. This price is a 33% premium over the average daily closing price of the past 60 days until August 26th. After careful analysis and review of IKON's assets, business operations and prospects, RICOH considers that this price is fair and reasonable. (*1) Exchange rate is $1 = JPY106.42, unless otherwise noted.

Finance: RICOH will finance the Transaction with a mix of its own and external funding.

3. Acquisition Process

The Transaction will be implemented by merging an acquisition subsidiary wholly owned by RAC, Keystone Acquisition, Inc., with and into IKON.*2 The merger requires the approval of the majority of IKON’s outstanding shares at its shareholder meeting and will result in IKON continuing as the surviving company. Through this process, RAC will acquire all of the outstanding shares of IKON from IKON’s shareholders ($17.25 in cash per share). The Transaction is subject to approval of North American and European antitrust authorities. The parties intend and expect to expeditiously complete the process during the fourth quarter of calendar 2008. (*2) This process is referred to as a reverse triangular merger in the U.S.

4. Impact on financial results of Ricoh

The specific impact of the Transaction on RICOH’s consolidated financial results for the fiscal year ending March 2009 will be disclosed when appropriate.


About Ricoh

A global leader in digital office solutions, Ricoh (www.ricoh.com) creates new value at the interface of people and information, offering a broad range of digital, networked products, including MFPs, printers, fax machines, semiconductor related products and digital cameras. With 83,400 employees worldwide, and $22 billion in revenue, Ricoh is also one of the world’s leading environmentalist companies, committed to sustainable business everywhere.

About IKON

IKON Office Solutions, Inc. (www.ikon.com) is the world's largest independent channel for document management systems and services, enabling customers to improve document workflow and increase efficiency. IKON integrates best-in-class copiers, printers and MFP technologies from leading manufacturers and document management software and systems, to deliver tailored, high-value solutions implemented and supported by its global services organization – IKON Enterprise Services. With fiscal year 2007 revenue of $4.2 billion, IKON has approximately 24,000 employees in over 400 locations throughout North America and Western Europe.
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AP Art Post (Guest)
quote:
Originally posted by Neal:
the world as we have known it is rapidly changing.....any guesses what's next?
I have heard that HP is in the process of actively opening direct sales offices around the county.


Plus I read that HP is paying a portion of the sales rep comission and or salary for some dealers.
C copierdudeDocusultant P4P'er
I knew IKON was looking at being purchased awhile back by HP so they have been on the market for awhile. Did I read this correctly... "requires the approval of the majority of IKON’s outstanding shares at its shareholder meeting and will result in IKON continuing as the surviving company" Sounds like IKON will be Ricoh's "brand" now. So the name Ricoh will be no longer or what?
AP Art Post (Guest)
Letter from Ikon to employees:

Words From IKON's Espe - Internal IKON Memo
Memo to the crew, from Espe...

"Today we announced the exciting news that IKON is to be acquired by Ricoh Company, Ltd., subject to the satisfaction of customary closing conditions. A copy of the press release we issued is attached for your information. As you know, Ricoh has been one of our valued equipment partners for many years and we are thrilled that we will now be joining forces with them to create a stronger global office solutions competitor.

Let me explain why we chose to take this important step. As our Board and management looked at the future of our company, we focused on how going forward we could best meet our customers’ needs, deliver value to our shareholders and create opportunities for our employees. 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.

We believe that as part of a combined company in the highly competitive and evolving office equipment industry, we can leverage our sales, service and marketing depth with Ricoh’s engineering and manufacturing expertise to better understand and more rapidly respond to the needs of our customers. In addition, we anticipate that this transaction will create new opportunities for our employees, as you will be working for a larger organization with enhanced growth prospects.

The unmatched expertise and strong skills of IKON’s people were a significant reason why Ricoh wanted to acquire IKON and they are very much looking forward to working with our team.

Following the completion of the transaction, Ricoh intends to operate IKON as an independent subsidiary and has no immediate plans to merge or consolidate the organizations or to make any changes as a result of this transaction. Of course, we will remain committed to serving all our customers and we have every intention of continuing to provide them with world-class service and support, regardless of the equipment they use.

While we are very excited about today’s news, it is important for you to know that it will take several months to complete this transaction. In the meantime, it will be business as usual for us. We anticipate that the transaction will close before the end of calendar year 2008. From now until then, it is critical that we all stay focused on selling, servicing and meeting the needs of our customers, and achieving our objectives to finish the fiscal year strong...

...I’d like to end by thanking you for your continued hard work and dedication to IKON. It is your contributions that have made our company an attractive partner for Ricoh and I am confident that if we all can continue to focus on what we do best, we will all have a very bright future to look forward to as part of the new Ricoh.

Matt"
AP Art Post (Guest)
"Ikon, Unisource have similar growth plans" - 1997
Has it really been 11 years?

I ran across this article today, "Ikon, Unisource have similar growth plans" from the Philadelphia Business Journal - by Bob Brooke.

"When Alco Standard Corp. of Valley Forge split in two to form Ikon Office Solutions Inc. and Unisource Worldwide Inc. on New Year's Eve, the move culminated a long-planned move to give its two main business units much needed freedom.

And in some respects, the spinoff can be seen as simply a civilized business transaction between two gentlemen -- Ikon Chief Executive Officer John Stuart and Ray Mundt, Unisource's CEO.

For years, the giant company, built on office copiers and paper, had been replicating itself through hundreds of acquisitions across the country. Alco began to take shape in the 1960s when Tinkham Veale, a wealthy Cleveland investor, assembled dozens of firms that included companies in fertilizer, machinery, electronics, coal and ice cream. In 1984, Alco sold off its manufacturing companies and focused on distribution, including its paper business, Paper Corporation of America. "

Stuart, having worked for Ricoh Corp., IBM and Royal Business Machines, joined the company in 1985 to restructure its office-products division...
----

The article is a trip. A trip down memory lane. This one line stumbled me up,



-- "Stuart plans to grow Ikon from $3.3 billion annually to $10 billion in the next three years. He also plans to increase the amount of outsourcing his company does from $450 million to $2 billion in the same time. While Ikon has only been in the technology servicing field for a year, he plans to grow this segment from $325 million to $2 billion."---


Well, we all need dreams, right?
AP Art Post (Guest)
Levi & Korsinsky, LLP Investigates IKON Office Solutions

WOW. That was fast. Like we need to give lawyers more work -

NEW YORK, Aug 27, 2008 (GlobeNewswire via COMTEX) -- "Levi & Korsinsky announces an investigation on the proposed acquisition of IKON Office Solutions...Levi & Korsinsky has expertise in prosecuting investor securities litigation and extensive experience in actions involving financial fraud and represents investors throughout the nation, concentrating its practice in securities and shareholder litigation. "

LOL!

Sometimes, you don't need to hear a siren to know that somebody will be chasing ambulances.
AP Art Post (Guest)
IKON, Ricoh - with the possibility of ANOTHER BIDDER?
there is an "undertone" out there - is there another bidder willing to go after IKON?

From Dividends.com, "...This acquisition continues a trend we have been seeing, in which office equipment makers have been acquiring distributors to strengthen their sales channels and product offerings. Ikon has 400 sales and services mainly in Europe and the U.S. Ricoh had recently acquired the European operations of copier service and supply company Danka Business Systems.

This is a solid offer in place, but we have added the shares of Ikon Office Solutions to our recommended list, as the possibility of another bidder jumping into the fray is a possibility. The company has a dividend yield of 1.03%, based on Tuesday's closing stock price of $15.56..."

In addition to this being the biggest move in the industry - ever - it could get even more delicious.
AP Art Post (Guest)
P4P'ers this was posted on the KonicaMInolta P4P, very funny!

Now that Ricoh combined the family (Gestetner, Savin, Lanier and Ricoh) and has purchased Ikon,

And Xerox has purchased Global,

And Konica Minolta has purchased Danka…



Canon has announced their new marketing strategy:

SUPERSTORES!!!






(Pictured above is the new Canon Superstore in Kanpur, India)



(just kidding!!)



But seriously, would you spend $1.6 billion to purchase a distribution network, and continue to allow your competition to make a profit selling through your new stores?


__________________
Dave
AP Art Post (Guest)
oh, thats funny!! Kudos.... I think Ricoh had to recapture what they lost to Xerox and besides buying more dealers there was no surefire way to get this done. Alas its like the yankees and the redsox, they may take a marginal player if waived so the other team can't get them. It was no secret that Ikon was for sale (found this out today), at least among the big wigs. So, was Ricoh going to let Canon, Xerox, HP or KM get the additional distribution that Canon will lose.

I think the biggest loser here is Canon! I was talking to a friend in Gainesville today and my thoughts is that Canon may move to buy HP. He did not think Canon was big enough, however Canon last year brought in 4,550.5 Billion Yen in sales, I still trying to figure out the conversion to US dollars (LOL).

All in all, what really is left??
AP Art Post (Guest)
Reverse Traingular Merger: What does it Mean?


"When the subsidiary of the acquiring corporation merges with the target firm. In this case, the subsidiary's equity merges with the target firm's stock. As a result of the merger, the target would become a wholly-owned subsidiary of the acquirer and shareholders of the target would get shares of the acquirer."
AP Art Post (Guest)
thought you would find this interesting


Ricoh Acquires IKON – What This Means For Them And Competitors Angèle Boyd August 27, 2008

Today, August 26, 2008, $22B Ricoh Company, Ltd. announced that it will acquire IKON Office Solutions, Inc. through its U.S. subsidiary, Ricoh Americas Corporation. The facts of the deal are: IKON, with $4.2B FY07 revenue will be acquired for US$1.62B, a 33% premium over the past 60 day average stock price. IKON’s revenue is about 87% N. American (94% U.S.) and 13% W. European.

The deal is expected to close in the fourth quarter of calendar 2008. It is subject to the approval of N. American and European antitrust authorities.

The acquisition will be done by merging a newly created acquisition subsidiary wholly owned by Ricoh Americas, Keystone Acquisition Inc, with and into IKON.

Major IKON partners and Ricoh competitors – Canon and Konica Minolta, have not announced publicly if they will sustain their IKON partnerships.

The IKON executive team stays on and there is no expectation at this time that any downsizing will result due to the acquisition.
Since Ricoh is buying 100% of IKON stock, it will assume all IKON’s debt.

In brief, the significance of this announcement is that it is a major win for Ricoh and IKON, a big challenge for IKON partners - Canon and Konica Minolta if they end their IKON relationships, and an alarm bell for HP, Xerox and other players focused on the mid-market, large enterprises, managed/professional services, and the production segments.
Ricoh gets a very large ready-made diversified IKON customer base of 500,000 customers, estimated to be 20% large, 60% mid and 20% small companies, and a managed and professional services business. IKON’s revenue is about 43% equipment, 33% services contracts, 21% managed and professional services, and 3% other. It also gets around 5000 sales/sales support resources.

So what’s ahead for Ricoh? The company has a lot of acquisition experience and will nee to apply that to IKON to ensure smooth integration and a payoff for such a substantive investment. Last year, Ricoh integrated Lanier’s direct operations into its own, and its European acquisition of Danka is said to be going smoothly. Now Ricoh must assure its direct channel (RBS) and its independent channels that investments will continue equitably, and that conflicts will be prevented with clear rules of engagement where overlaps occur. Sooner than later, Ricoh needs to rationalize how all its recently acquired companies will reach small through large companies (e.g. will IKON and RBS both target enterprises or will their efforts be merged?) Finally, Ricoh will have to deal with all the debt it just took on from IKON, and it will surely want to see results on its numerous recent acquisitions. While its corporate revenue grew 7.3% (12.9% outside Japan) from FY07 to FY08, net income declined 4.5%.

Given the frenzy to acquire office equipment dealers in the past few years, that IKON is the last independent mega office equipment dealer, and it represents so much business for Canon and Ricoh and potential business for HP, IDC has noted many times that these three were the most likely to buy IKON and that Canon had the most to lose. In one-fell swoop, Ricoh places Canon, its biggest competitor, the second largest HCP brand in the U.S., and IKON’s largest partner, in a difficult situation.
If Canon ends its relationship with IKON as it did with Global Imaging when Xerox acquired them, it will have to make up about 30% (estimated at $860M) of its overall U.S. office hardcopy equipment revenue, and an even bigger, roughly 60% of its Production hardcopy equipment, that is sold through IKON. Canon is IKON’s biggest partner at 60% of IKON’s equipment revenue, Ricoh is at 30% and other vendors including Konica Minolta, make up the remaining 10%. Ricoh and IKON have been deepening their relationship in the past 5 years (e.g. Ricoh dedicated a team to support the IKON partnership).

And, IKON, for some time now, has been investing so it could shift from being a holding company to an operating company and in the past 2 quarters has shown improving financial results.

Canon will not yet say what it will do, but it has much to lose and we would advise them not to sever their IKON relationship anytime soon.
Shifting aggressively to dealer acquisitions and building out its direct organization further would be wise. The key for Canon is that it needs to build out sales capacity and services, if it wants to replace IKON.
It is unclear if Konica Minolta who has an OEM IKON relationship in the color production space, will maintain its relationship. They were one of Global Imaging’s largest partners, far larger than Canon, and maintained that relationship. If its business with IKON is of a similar size, we surmise that the relationship will be maintained at least near term, as it pursues alternatives.

The announcement is an alarm bell for Xerox and HP. IKON’s 500,000 customer base we estimate is 60% mid-market focused and 20% enterprise and these are two key investment segments for Xerox and HP. However, Ricoh has a lot of digesting to do, so these and other competitors have time to respond. While Xerox’ Global was about $1+B at acquisition and is smaller than IKON’s 4.2B revenue, Global’s revenue growth and margin have been stellar and far superior to any of the other mega dealers’. HP has an IT reseller base to reach SMBs that is the envy of competitors. IKON’s acquisition will surely quicken competitor’s execution pace. Isn’t that what competition is for?

Michael Orasin, Riley McNulty and Keith Kmetz also contributed to this Link
AP Art Post (Guest)
Ricoh Co Ltd gave a press conference on Ricoh Americas Corp's acquisition of IKON Office Solutions Inc from 9:10 pm Aug 27, 2008, in Tokyo (See related article).


Following are the comments made by Ricoh's President and CEO Shiro Kondo and CFO Zenji Miura on the aim of the company's unprecedentedly large-scale acquisition.

• The purposes of the buyout

-to strengthen the sales force in the North American market
IKON counts many of the Fortune 500 companies as its customers.

-to reinforce the service business
IKON is making profits from its business of contracting for all kinds of printing-related activities. And the business scale is large enough to account for 19% of the company's sales.

• The reason for strengthening the service business

Ricoh has been providing merits to its customers through hardware. However, those merits are shrinking every year. In addition, customer needs are changing. They are now asking not only the useful functions of copy machines and multifunction copy machines but also advanced services such as the improvement of workflows and security.

One of the collateral evidences is the sales of our small-size multifunction copy machines that support A4 paper size. They are being used less widely than expected in developed countries, aside from emerging countries. We aim to deeply cultivate the markets in developed countries by the service business.

We will never give up the basic principle of manufacturing industry – making hardware with great care. On that premise, we want to be a company that provides software services. That's why we will put in resources to reinforce our service business.

• The relationship with Canon

Sixty percent of IKON's sales are coming from Canon Inc's products, and our products account for about 30% of the sales. We do not think that the percentage of Canon will continue to stay at that level, but we will try to keep it. For that purpose, we have to prevent IKON's top executives and customers from falling away.

• The earnings estimate

Our annual sales will increase by about ¥400 billion (US$3,669 million). In respect to the operating profit, we do not expect that IKON will turn a profit soon after it becomes part of the Ricoh Group because there will be an opportunity loss. But, for the future, we want to double IKON's operating profit posted in September 2007 to achieve an operating profit margin of 10%.

The integration plan

Though we will consolidate the back-offices (administrative departments), IKON and Ricoh Americas will continue to be independent companies. The sales figures and the number of employees of IKON are larger than those of Ricoh Americas. We will work out an ideal structure of the companies while making consideration to IKON.


If it becomes clear in the future that it is more rational to integrate the sales and service networks of IKON and Ricoh America, we will do that.

• The business environment for distributors

It is now at an inflexion point. These days, it is not easy to sell new models of copy machines and multifunction copy machines just by introducing them to the customers.

Even if a distributor has an edge over its competitors in certain geographical areas, it can lose orders because multinational companies prefer to call bids for copy machines to be used in their offices scattered around the world. So, we also have to become powerful system integrators.

Under those circumstances, independent distributors are planning new strategies, one of which is a sellout. Before our purchase of IKON, Xerox Corp bought Global Imaging Systems Inc and Konica Minolta Business Solutions USA Inc acquired Danka Office Imaging Co.

• Other comments

· The press conference took place late at night in Japan to make the announcement in London, New Jersey and Tokyo at the same time.

· The buyout was proposed by IKON in about April 2008. At that time, Ricoh, just after finishing integrating information systems around the world in 2007, was about to go on an offensive.

· The amount of money sourced from external funds will be about ¥170 billion (approx US$1,559 million), equivalent to the amount paid for the acquisition, because the corporate bonds that we have already issued will soon mature.
AP Art Post (Guest)
picked this up in an email, this is from Gartner, a review of the ricoh buy of IKon:


NEWS ANALYSIS
Event
On 27 August 2008, Ricoh announced a definitive agreement to acquire IKON Office Solutions (a
channel supplier that operates in North America and Western Europe), through Ricoh's wholly
owned U.S. distribution subsidiary, Ricoh Americas. The purchase price is approximately $1.6
billion. The deal is expected to close in 4Q08.
Analysis
Ricoh is currently the No. 4 and No. 5 copier/flatbed multifunction product (MFP) technology
provider in North America and Western Europe, respectively. Owning IKON outright will:
• Augment Ricoh's distribution of its Ricoh, Savin, NRG and Lanier brands throughout its
current market
• Provide a major channel to complement Ricoh's previous deals, enabling the company
to benefit in managed print services (MPS) and its light and heavy production equipment
Ricoh's acquisition of IKON will affect every vendor in the print technology market. In particular, it
will impact Canon, which has held the top market share position every year since the early 1990s
in the North American A3 copier/MFP segment. When this deal closes, Ricoh will control a
company (IKON) that sells more than $1 billion of Canon's copiers and MFPs in North America
(representing 60% of IKON's 2007 revenue).
Ricoh faces several potential scenarios, depending on Canon's response to this deal, all
benefiting Ricoh more than Canon:
• If Canon drops IKON as a distribution partner, Gartner believes that Ricoh's
manufacturing plant in Japan will have to boost capacity to make up volume potentially
lost to Canon. Customers that choose to stay with IKON and switch to a Ricoh device
would pose an even larger challenge, as they would force Ricoh to increase its device
production sooner, to make up for the vacuum caused by Canon's departure.
• If Canon continues to use IKON, likely through an OEM agreement, then Ricoh/IKON
will be obligated to service the current Canon hardware until the contract term expires
before it has an opportunity to convert customers.
• If Canon successfully counters Ricoh's bid for IKON, it would be contrary to Canon's
usual practice of building from the ground up. Canon has lost several such recent
opportunities, as its rivals have snatched up potential distribution channels and partners.
If Canon acquired IKON, it would be required to pay a penalty fee to Ricoh. But the deal
would enable Canon to solidify its existing relationship with IKON and gain additional
throughput, and would give it an organization well-equipped to expand IKON's MPS
product. Canon would face the challenge of integrating a company with a very different
culture from it own, which could distract it from its main business and might enable
Ricoh to entice away some of its customers.
Based on Canon's past reaction to similar deals with its channel partners, Gartner believes
Canon will ultimately end its formal relationship with IKON, but will continue to support its
products and abide by existing contracts until the deal closes.
Publication Date: 2 September 2008/ID Number: G00161107 Page 3 of 4
© 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
RECOMMENDATIONS
• IKON MPS and enterprise customers with Canon hardware: Ask IKON about the
continued support of Canon hardware under IKON's management agreements.
• Ricoh enterprise and MPS customers: Continue as usual, as IKON will now be more
committed to the Ricoh base and is likely to deliver improved service to the Ricoh fleet.
MPS buyers won't be immediately affected. In the longer term, Ricoh will increase its
geographical reach, particularly in North America.
• IKON customers using Ricoh, HP, Kyocera Mita and Konica Minolta hardware:
Expect minimal near-term impact, as your contract will protect you. However, during the
next several quarters, monitor whether Konica Minolta, Kyocera Mita and HP reroutes
their products through alternate channels not owned by a significant competitor.
RECOMMENDED READING
• "Konica/Danka Deal Will Transform U.S. Distribution Landscape” — When the deal
closes, IKON Office Solutions will be the only large, independent, nationwide distributor
of printers, copiers and MFPs in the U.S. By Don Dixon and Ken Weilerstein
• "Dataquest SWOT: Canon, Worldwide, 2007” — By building its service network
organically as well as through acquisitions, Canon is becoming more nimble and better
able to compete with Xerox and HP on national bids. By Don Dixon, Sharon McNee
and others
L learnerSenior P4P'er
Well if the danka merger is going well as written in the statment i wonder what they would comment on the Ricoh uk and NRG merger

One thing is for sure Ricoh want to provide a nationwide service like it has bulit up in the Uk over the last 20 odd years. Was very slow at first and now at least on paper covers the entire Britsih isles as Ricoh
AP Art Post (Guest)
Goldman compares Ikon-Ricoh deal with others
Shareholders of Ikon Office Solutions Inc. who are being asked to approve the Exton company’s acquisition by Ricoh Co. Ltd. may wonder how the deal compares to others involving office equipment distributors.

Analysis by Goldman Sachs & Co. that’s contained in the proxy statement shows it’s not the best, but it’s not the worst either.

Ricoh is offering $17.25 per share in cash, or $1.62 billion. Goldman Sachs calculates that works out to 0.5 times Ikon’s last 12 months of sales or 8.2 times its earnings before income taxes, depreciation and amortization, or EBITDA.

In contrast, Xerox Corp. paid $1.72 billion for Global Imaging in 2007. That’s 1.6 times sales, or 12.2 times EBITDA.

Still there’s a world of difference between a deal proposed in 2008 and one done in 2007. The current times are more like the no-no days, rather than the go-go days.

Goldman did include another 2008 deal in its comparison. Konica Minolta bought Danka Office Imaging Co. for an estimated $240 million. That values Danka at 0.55 times sales. (Goldman listed EBITDA as not meaningful.)

So is it a good deal? One of the proxy governance firms that institutional share-holders rely on - ISS Governance Services - thinks so. Ikon says ISS is recommending shareholders approve the Ricoh offer on Oct. 31.

Follow the Money

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