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I received this email from a Print4Pay Hotel member the other day. @gap

Hello Art,

For the last two or three years investment companies have been buying independent copier dealerships. We've been seeing this all throughout the United States and I know of others in other parts of the world.

The conversation with an industry professional that is smarter than me he suggested that this is a Wall Street ploy being architected by the investment community. The goal is to purchase several different companies and package them together to sell to a major player like Xerox or HP. Imagine an investment company that is purchased 250 million or $500 million worth of independent dealers and then sold them to Xerox. It's not unlike one IKON was sold to Ricoh. It would be a gigantic shift in the market place.

You seem to run in the circles of those that are industry titans and if you have time ask them their opinion of this theory. If this is not the in play I wonder what their opinion is?  There must be a reason why they are doing this lately and not for the last 20 years.  By the way, the sale of DEX imaging to Staples further supports this investment play.

Thoughts

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Original Post

Yes, I believe that this is definitely the strategy. Konica Minolta/Danka, Ricoh/IKON, Xerox/Global Imaging, and Staples/DEX are prime examples of this coming to fruition.  I expect that there will be more of this type of activity in the very near future and I'm just waiting for it to happen.  I think that Xerox and HP are two ideal candidates to purchase a mega dealer based on their recent channel acquisitions in the UK (and Xerox in Canada).  Both companies have also stated that they will invest in new growth opportunities if/when the right deal emerges.

On the flip side, this strategy didn't fare too well for Konica Minolta and Ricoh, which have both reduced their direct operations since their respective M&A deals took place in 2008.  Xerox, however, is arguably positioned as one of the largest technology resellers and despite restructuring the XBS unit (formerly Global Imaging) in the last few years, a large channel investment seems like a better fit for them than the other OEMs.

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