Ricoh to buy IBM digital printer business: Nikkei

Tokyo, Jan 25: Ricoh Co will buy IBM's digital commercial printer operations for about 0 million in April, the Nikkei newspaper said on Thursday, sending shares in the Japanese office equipment maker up 5 percent.

The paper said the acquisition, which would be Ricoh's largest ever, would make it the No.1 player in the growing market for devices that are connected to companies' internal systems to print contracts and other documents quickly and in large volumes.

It added the business generates annual revenue of some 120 billion yen (5 million) for IBM, including sales of toners and other related goods. Other major players in the digital business printer market include Xerox Corp.

Analysts cheered the move, which they said would produce a stable profit stream for Ricoh. Ricoh bought Hitachi Ltd.'s printer business in 2004.

Deutsche Securities analyst Yoshikazu Higurashi said Ricoh would be able to expect an earnings boost by having both high-end and low-end printers as corporate clients seek to make their operations more efficient with digital business printers.

''Since this would have Ricoh make more printers, it would allow the company to cut production costs as well,'' he added. ''The move would be a plus in every aspect.'' Ricoh will mainly use its own capital to finance the purchase, the newspaper said.

In November, Ricoh said it would sell 50 billion yen (2.7 million) in bonds to help redeem maturing debt and raise funds for investments, including its acquisition of the European unit of copier service provider Denka Business System.

The global digital business printer market is estimated at around 3 trillion yen and is expected to grow 10 percent a year, the paper said.

Satoshi Aoki, a spokesman for Tokyo-based Ricoh, declined to comment on the article.

IBM spokesman Fred McNeese in New York said the report was based on speculation and declined to comment further. IBM, which sold its personal computer unit to Lenovo in 2005, is shifting the focus of its operations to software and services.

Rival Canon Inc. last June also said it would enter the commercial digital printer market, aiming to gain a 20 percent share of the global market.

Shares in Ricoh closed 5.2 percent higher at 2,540 yen, outperforming a 0.28 percent fall in the benchmark Nikkei average.

Reuters