IBM and Ricoh to create joint venture printing systems company
IBM and Ricoh have announced the formation of a joint venture company based on IBM's Printing Systems Division. Over the next three years InfoPrint Solutions Company will evolve into a fully owned subsidiary of Ricoh. On closing of the agreement between Ricoh and IBM, Ricoh initially will acquire 51 percent of the joint venture, which will be called the InfoPrint Solutions Company, and will progressively acquire the remaining 49 percent over the next three years as the joint venture evolves into a fully owned subsidiary of Ricoh.
As consideration for the transaction, IBM will receive $725 million in cash upon closing, which includes a management fee of $35 million. The cash received is consideration for the initial 51 percent acquisition of the joint venture by Ricoh as well as a prepayment for the remaining 49 percent to be acquired and certain royalties and services to be provided by IBM to the InfoPrint Solutions Company. Final consideration for this transaction will be determined at the end of the three-year period based upon the participation in the profits and losses recorded by the equity partners. The initial transaction is planned to be completed in the second quarter of 2007.
"IBM and Ricoh have both benefited from a strong relationship for many years, and this agreement is a natural extension of that relationship," said Samuel J. Palmisano, IBM Chairman, President and CEO. "In addition to its proven track record in the print industry, Ricoh will provide the investment necessary for the InfoPrint Solutions Company to continue to innovate and grow, which will benefit current and future customers."
"We will invest the necessary resources to make InfoPrint Solutions Company into a core business. Building on our long association with IBM, we look forward to creating an infrastructure that can address complex solutions and mission critical environments," said Masamitsu Sakurai, President and CEO, Ricoh.
