Xerox Corporation has announced it will purchase Global Imaging Systems, a previously independent provider of office products and services, in an all-cash deal. Xerox will pay $29 per share, nearly $1.5 billion, in order to add GIS to its in-house sales and service groups.
Global specializes in copiers, printers, and presentation equipment sales and service, primarily to small and mid-sized businesses in the US. Xerox said in a statement that it will add Global's 4500 employees to its own ranks, including 1400 new field sales representatives. The acquisition also gives Xerox a customer base of 200,000 locations.
The acquisition is clearly one Xerox expects to earn synergistic benefits from, as the market value of Global was roughly $20 per share before Xerox announced its offer. The capture of new customer markets, deeper reach into smaller businesses, and the continuing revenue from service contracts are potential sources of return.
An industrial high-flyer until the mid-1990s, Xerox came to be widely regarded as a company on the ropes and on the brink of bankruptcy near the turn of the millennium as its core copier business had been eroded by a variety of multinational competitors and the world moved away from mass-produced print products to a hybrid online document model. Xerox has dabbled in other acquisitions in recent years, but the Global deal marks an unheralded return to billion-dollar deals.
Xerox also announced that long-time executive Ursula Burns is joining the board of directors and moving from president of business group operations to corporate president.
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