Xerox to Acquire Global Imaging Systems for $1.5B

News that Xerox intends to buy Global Imaging Systems, an office technology dealer, for $29 per share in cash, sent Global's shares up 47% to $28.64. The transaction is expected to close next month, subject to antitrust approval and tender of at least a majority of Global's shares. It is the largest of three acquisitions made by Xerox over the past year. Global gives Xerox access to nearly 200,000 consumers, served by more than 1,400 sales representatives, increasing Xerox's distribution to small and mid-sized businesses by 50%. Xerox CEO Anne M. Mulcahy said she thinks it's a "very significant" transaction, calling it "sizable" and saying "it clearly transforms our ability to grow our top line." Global's sales totaled more than $1b for the year ending in Mar. '06 and net income was nearly $62m. Global currently does not sell Xerox products. Shares of Xerox gained 1.1% to $17.08 and have a 52-week trading range of $13.16 - $18.32.

Sources: Press release, Associated Press
Commentary: Xerox Does the Right Thing and Cuts Estimates - Will Analysts Follow Suit? • The Spirit of Honest Debate: Xerox Responds To Criticism
Stocks/ETFs to watch: Xerox (XRX), Global Imaging Systems (GISX). Competitors: IKON Office Solutions (IKN). ETFs: PowerShares Dyn Hardware&Con Electronics (PHW)

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