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September 1, 2008

Excellent Strategic Move

Analysis of: RICOH to Acquire IKON Office Solutions, Inc. | www.marketwatch.com | investors.ikon.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Edward Crowley, Senior ConsultantEdward Crowley
Senior Consultant, Woodford Group, LLC
Implications: Industry consolidation is, to some extent over because there is no one left to acquire!  Our News posting and client report identifies how this is an excellent strategic move for Ricoh, and a significant threat to Canon.

Analysis: As I mentioned in my news article earlier this week, and in my client report which we published on the day of the announcement - this is an excellent move for Ricoh for several reasons:

1) It strengthens Ricoh's Managed Print Services push by adding very strong Stage 3 capabilities;

2) Ricoh captures the last remaining independent dealer with national coverage (who by the way was Canon's largest reseller for their highly profitable Imagerunner MFP products); and,

There are challenges to successful execution including a growing number of Ricoh HQ locations (i.e. unnecessary overhead) and avoiding conflict with Ricoh's existing dealers.  

This may actually help HP since it means a weakened Canon may be in a more vulnerable negotiating position as they negotiate new product agreements.

Again, another good acquisition in a series of very strategic moves by Ricoh.

Other Analyses of the Same Source Article:
What is next for the US office products industry - winners and losers?
August 29, 2008, Author: GLG Expert Contributor

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