Global buysCOMDOC...yes you heard correct!

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Global operates as wholly own sub of Xerox and has been buying well run dealerships before Xerox and will continue to aquire dealerships if it makes good business sense.

The layoffs and the purchase are mutually exclusive

I don't agree, being that I find it hard to believe that Xerox never new they were overstaffed and had off lay off 3,000 workers. The workers were laid off in order to reduce the bottom line, increase stock value. Xerox will suffer from now being understaffed.

What will be paid for Comdoc??? 50 million, 100 million???

Ricoh will surely utilize IKON to go after the COMDOC base and probably not add any Independent Dealers in the Ohio and upstate NY marketplace.

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Originally posted by Art Post:
What will be paid for Comdoc??? 50 million, 100 million???

It will be much more than that, they have annual revenue of $125 million last I heard. Going price is (depends upon the situation) a few times annual revenue.

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Well. what if Ricoh laid off 3,000 workers and and IKON (a Ricoh company) went out and bought a 150 million dealer?

It is fact that as Ricoh did indeed lay off employees, they went out and purchased IKON.

Also, now that Ricoh lost COMDOC, additional layoffs are certain.

"It is fact that as Ricoh did indeed lay off employees, they went out and purchased IKON."

Yes, but which logical fallacy is occuring? Is it post hoc, where we falsely assume that because B followed A, A must have caused B, or is it Joint Effect, where B is held to have been caused by A when in fact A and B were the joint effects of another cause?

If Xerox had 3,000 ineffective workers, and it's hard to imagine a Fortune 500 company that doesn't, then the layoffs were appropriate. If ComDoc was available at a price that would allow it to deliver an above market rate of return, then the purchase was appropriate.

Paranoia, however, will cause us to embrace the fallacies...

okay...just so you know, I failed algebra so all of this A following B or B being the causation of A before C...I'm so confused...
and btw when I embrace someone, it is okay to touch the falacies?

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"It is fact that as Ricoh did indeed lay off employees, they went out and purchased IKON."

Well, almost right and proves my point, that the money came from the manufacturer and not the subsiderary (I know I butchered that). But, Ricoh did not lay off three thousand workers in order to do the Ikon deal.

The point is the economy is a tough issue right now, if the pockets run that deep at Xerox, I think they could have held on the employees and made the purchase!

I'm more concerned about the 3,000 people that lost their jobs. I quess that's where they found the 200 million or so to buy Comdoc. I'd love to see the financials on this one.

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Yes, but which logical fallacy is occuring? Is it post hoc, where we falsely assume that because B followed A, A must have caused B, or is it Joint Effect, where B is held to have been caused by A when in fact A and B were the joint effects of another cause?

I failed too!

Geez, what's with old dog copier guys and Algebra - took it twice in High School and passed it once then had to pass it again in college and barely passed. At RxR crossings I break out in a cold sweat waiting for Train A which left Peoria at 25 mph heading east and Train B which left Detroit heading west at 35 mph to collide 'cause I can't figure out where they'll crash . . .

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Originally posted by JasonR:

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Originally posted by Art Post:
What will be paid for Comdoc??? 50 million, 100 million???

It will be much more than that, they have annual revenue of $125 million last I heard. Going price is (depends upon the situation) a few times annual revenue.

What were IKON's annual revenues and what did Ricoh pay? Much less...

DID XEROX or GLOBAL make this acquistion?

Press Release states GLOBAL - you all need to quite hatin and move on with your copier lives....

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Originally posted by Laxfan25:
What were IKON's annual revenues and what did Ricoh pay? Much less...

The difference there is that Ricoh was a publicly traded company. Their stock was in the can, so anyone with the cash could walk up and buy controlling interest for X (the price of the stock) times Y (total number of shares).

IKON basically had no choice at that point.

COMDOC, on the other had, was NOT in the can, was NOT losing money every quarter, etc. Plus, they were owned by the employees who had to vote to approve the purchase (meaning they could say no if they didn't like the $$).

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DID XEROX or GLOBAL make this acquistion?

Press Release states GLOBAL - you all need to quite hatin and move on with your copier lives....

Brain:

What gives??? It's an excellent discussion.

I've heard the sale price should be about 5 times earnings. 150 million dollar dealer should have 10% profit, thus 15 million per year, and should equal a sale price of $75 million.

we'll see..................

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I've heard the sale price should be about 5 times earnings

When a dealer is purchasing a dealer, this is the general guideline. Ignoring cost of funds, the company I buy will pay for itself in five years if you follow this model. Sooner if you improve results after buying the company.

BUT.

When a manufacturer buys, this goes out the window. If COMDOC was a $150M company, doing $75M in equipment sales with Ricoh, Xerox just bought a $75M sales gain along with the manufacturer margins that go with those sales.

So every year they get the $15M we think they are already making, plus perhaps $20M in manufacturer GP by selling Xerox product that would not otherwise be sold, or $35M per year. Five times $35M is $165M or 1.1 times revenue.

I'll bet it went for between 1.0 and 1.5 times revenue.

Will we ever know?

Which leads me to this poll

Will we ever find out how much Global/Xerox paid for Comdoc?

Hrmm. Since Global is owned by Xerox and Xerox is a public company, won't the costs for this purchase be listed in the annual report?

Or will there just be a line saying Global "lost" X million dollars this year due to expenses?