Ricoh and IBM have formed a joint venture company based on IBM’s Printing Systems Division and Ricoh’s digital office solutions.
On closing of the agreement between the companies, Ricoh initially will acquire 51 per cent of the joint venture, which will be called the InfoPrint Solutions Company, and will progressively acquire the remaining 49 per cent 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 US$725 million in cash upon closing, which includes a management fee of US$35 million. The cash received is consideration for the initial 51 per cent acquisition of the joint venture by Ricoh as well as a prepayment for the remaining 49 per cent 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.
Richo president and CEO Masamitsu Sakurai said this agreement is key to Ricoh’s efforts to become a leading global provider of output and print solutions. The company is willing to invest the necessary resources to make InfoPrint Solutions Company into a core business.
