Xerox to buy Global Imaging Systems for $1.5 bln
Monday April 2, 8:35 am ET
NEW YORK (Reuters) - Xerox Corp. (NYSE:XRX - News) said on Monday it would acquire office technology products provider Global Imaging Systems Inc. (NasdaqGS:GISX - News) for $1.5 billion in an effort to expand its reach in the small and mid-sized business markets.
Stamford, Connecticut-based Xerox said the deal values Global Imaging at $29 a share, almost a 50 percent premium to its Friday closing price of $19.50.
Global Imaging shares rose more than 46 percent in pre-market trade.
Xerox, the world's largest provider of office printers, copiers and related services in the U.S., said it expects the acquisition to boost 2007 earnings.
Global Imaging sells printers and copiers to small and mid-size businesses, and it will start selling Xerox document-management products following the acquisition.
"They don't overlap much," Soleil Cross Research analyst Shannon Cross said of the deal. "It makes a lot of sense from that standpoint ... To me this represents Xerox management's willingness to think outside the box, to be more entrepreneurial, to be more aggressive."
The acquisition, expected to close in May, will add about 200,000 new customers. Global Imaging generates about $1 billion in annual sales, the company said.
The purchase will expand Xerox's distribution in the small to mid-sized business market by 50 percent in the estimated $16 billion market.
"Joining forces with Global Imaging Systems gives Xerox access to their extensive customer base," said Anne Mulcahy, Xerox chairman and chief executive officer.
The deal is expected to close in May. It is Xerox's third acquisition in the past year.
(Additional reporting by Ankur Relia in Bangalore)
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