Tektronix sells color printer business to Xerox
January 3, 2000 12:01 PM
BEAVERTON, Ore., Jan 3 (Reuters) - Electronics maker Tektronix, Inc. TEK said Monday it has completed the sale of its color printer business to Xerox Corp XRX for $925 million.
The original purchase price of $950 million, announced last September, was adjusted for various balance sheet items, the company said.
The deal, which was subject to regulatory reviews and was originally meant to close in November, furthers Xerox' efforts to challenge office-printing leader Hewlett-Packard Co. HWP . Xerox said last September it would pay cash for the Tektronix operation, the largest deal of its kind in Xerox' 103-year-year history.
Tektronix said it would return the majority of the proceeds to shareholders through a share repurchase program, as well as paying down debt and retaining some cash.
The company's shares were up $1.87 on the New York Stock Exchange Monday morning from Friday's close of $38-14/16. Xerox stock was also trading higher at $23-13/16, up from Friday's close of $22-11/16.
"We wish our former color printer employees the very best," said Jerry Meyer, chairman and chief executive officer of Tektronix. "With their expertise and technology, and the brand and reach of Xerox, they can be even more successful in the growing market for these products."
The unit employs 2,400 people and is based in Wilsonville, Ore. It will be combined with Xerox' operation in Webster, N.Y. When the transaction was announced, Xerox president and chief executive officer Rick Thoman said he did not envisage any layoffs.
Xerox' distribution capacity will nearly double to more than 16,000 resellers and dealers worldwide. The acquisition also gives Xerox access to Tektronix' solid ink printer technology and Phaser color laser printers.
Tektronix solid ink printer technology uses a solid color "crayon," which is designed to not bleed into the paper as is the problem with some inkjet printers.
The new color push by Xerox will not replace the black-and-white Xerox printers, but will be an area for growth, Xerox executives said.
((New York Equities Desk 212-859-1700)) REUTERS
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