Canon and Océ: More Details
Canon and Océ: More Details
By Cary Sherburne on November 19th, 2009
Océ management conducted a well-attended press teleconference today to provide further details of its acquisition by Canon. Jan Hol, who was interviewed earlier by WhatTheyThink, was on the line from Europe, and North America was represented by Mal Baboyian, president, production printing systems, Océ North America, and Joe Skrzypczak President and CEO of Océ North America. Océ reiterated that the intent of the acquisition was to create a global leader in the printing industry and to deliver scale in manufacturing, sales and marketing and R&D. Océ had been seeking an arrangement of this nature because it was clear that increased scale was among the essential success factors to create value and prosperity for stakeholders, something that was increasingly difficult for Océ to achieve as a standalone entity.
A few new details came out of this conference, including:
Océ will consist of three strategic business units (SBUs): Commercial Printing Systems, Wide Format Printing Systems (including Canon’s portfolio), and Business Services. It remains to be seen whether Canon’s relatively new services business will be rolled into the Océ Business Services SBU.
Océ, as a wholly owned division of Canon, will maintain its current responsibility for portfolio marketing, sales and services and the management of the SBUs will report to the Océ corporate board. Océ will lead R&D and manufacturing in The Netherlands, Germany and Canada. Sales and marketing will be organized by country.
A steering committee is being established to lead the integration between Canon and Océ for the office, including regional integration teams that include both Canon and Océ representation. At this point, management indicates it is unlikely an outside consulting firm will be engaged to facilitate the integration, which is expected to take up to three years.
The companies still plan to conclude the acquisition in the spring of 2010, at which time, listing of Océ shares on Euronext will be suspended.
When asked about potential counterbids, Hol stated, “As we stated last Monday, both the boards of both companies have agreed it is a fair price for shareholders. We are not in a position to provide further comments on the likelihood or unlikelihood of other bids.”
It is not clear what the outcome of the Océ/Konica Minolta alliance will be, although management on the call indicated Konica Minolta seems open and willing to work through the issues in the best interests of both companies and their customers, with Océ retaining an OEM contract that will provide Konica Minolta service, parts and consumables through the Océ channel for at least five years. It was too early to tell what might become of the joint R&D efforts the two companies had underway.
There are still many decisions to be made about where some specific products will fit in the portfolio and by whom they will be sold. Although there is little overlap, there is some, especially in the conjunction of office and production with products like the Océ 4000 family and the Canon imageRUNNER family. Nor is it clear where the Canon 7000 family will fit. It was intimated that some products would be sold by both the office and production groups.
With respect to PRIMSA, Baboyian stated, “PRISMA has been a cornerstone for us in production printing, very well accepted in the market. It is too premature for those kinds of details. We have to meet with Canon personnel during integration, but certainly PRISMA has been a very powerful software product portfolio we will look to capitalize on as much as possible, but we will also look at the Canon offerings as well.”
Océ has about 1,400 direct sales professionals in the Americas, and Canon has slightly less than that. Although specific figures were not available, Hol indicated that Canon/Océ direct sales forces were about balanced in terms of numbers in Europe. According to Skrzypczak, Oce´ is 99% direct in the Americas, except in wide format where there is a blend of dealer and direct sales.
Skrzypczak summed it up by saying, “Both companies share a huge commitment to technology and innovation. We also share similar values, a long term approach and a solid stakeholder approach. For Océ, this is a landmark event since it will become a wholly owned entity of a larger company. It is also a landmark event for Canon, since they have never acquired a company this large before, and have mostly grown organically. Canon is a monobrand company with a successful track record. Canon has agreed to maintain the strong Océ brand in all relevant markets. It is a full step forward.”