Thursday, September 18, 2014
Inquirer Daily News

Goldman compares Ikon-Ricoh deal with others

As Ikon Office Solutions shareholders get ready to vote Oct. 31, is the $1.62 billion price a good deal?

Goldman compares Ikon-Ricoh deal with others

Shareholders of Ikon Office Solutions Inc. who are being asked to approve the Exton company’s acquisition by Ricoh Co. Ltd. may wonder how the deal compares to others involving office equipment distributors.

Analysis by Goldman Sachs & Co. that’s contained in the proxy statement shows it’s not the best, but it’s not the worst either.

Ricoh is offering $17.25 per share in cash, or $1.62 billion. Goldman Sachs calculates that works out to 0.5 times Ikon’s last 12 months of sales or 8.2 times its earnings before income taxes, depreciation and amortization, or EBITDA.

In contrast, Xerox Corp. paid $1.72 billion for Global Imaging in 2007. That’s 1.6 times sales, or 12.2 times EBITDA.

Still there’s a world of difference between a deal proposed in 2008 and one done in 2007. The current times are more like the no-no days, rather than the go-go days.

Goldman did include another 2008 deal in its comparison. Konica Minolta bought Danka Office Imaging Co. for an estimated $240 million. That values Danka at 0.55 times sales. (Goldman listed EBITDA as not meaningful.)

So is it a good deal? One of the proxy governance firms that institutional share-holders rely on - ISS Governance Services - thinks so. Ikon says ISS is recommending shareholders approve the Ricoh offer on Oct. 31.

Follow the Money

Pennsylvania continues to commit funds to venture capital firms.

The Commonwealth Financing Authority has agreed to provide $2 million to a fund being raised by Argosy Partners, of Wayne, and $3 million to one being raised by Accelerated Technologies, of New Jersey.

These outlays comes from the Rendell administration’s $60 million New PA Venture Capital Investment program. The Department of Community and Economic Development said the state has committed $44.6 million in funding so far.

Of that total, $28.65 million is now in the hands of nine venture firms that are actively investing in young companies.

Quotable

The holidays are going to be ugly.

- Unidentified retailer, cited in the Philadelphia section of the Federal Reserve Bank’s latest “beige book” report of economic conditions.

Mike Armstrong Inquirer Columnist
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Mike Armstrong Inquirer Columnist
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