Global Imaging / ComDoc Deal

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Jan 30, 2009

Earlier today, Xerox Corp.’s Global Imaging Systems announced it is acquiring ComDoc, a regional document solutions provider (aka “dealer”) based in Akron, Ohio. While the financial terms of the deal were not disclosed, it was mentioned that after the deal is finalized, ComDoc will start selling Xerox document management products.  For those not embedded in the day-to-day battles of selling copiers and related solutions in the Ohio area, you might think, “OK, a local Akron dealer is acquired. Why is this even in the news?” Well, the reality is the ComDoc is larger than that.  Is this a blockbuster deal?  No.  It does not come close to ranking up there with the big deals over the past two years – Xerox/Global, KM/Danka, and Ricoh/IKON.  (I would put HP/EDS here too, but that’s a different type of deal all together.) But it does warrant some perspective.  Read on if you dare to care.

  • It’s down to the Regionals.  In terms of acquiring independent dealers, the U.S. mega-dealers are no longer there.  All eyes now shift to the regional or local players.  As far as the regional dealers go, ComDoc is definitely one of the big ones.  In fact, it’s probably one of the larger ones left in the U.S.  Could two big manufacturers team up and do something together?  I suppose, but don’t count on it in the near future.  For now, not a bad strike by Global.
  • What’s a ComDoc?  Aside from the now-humorous news on its website that needs to be changed (“ComDoc Becomes 100% Employee Owned”), ComDoc is an interesting acquisition for the Xerox/Global family.  Having been in business for more than 50 years, ComDoc appears to be a well-established company.  ComDoc also reports that it is the largest independent Ricoh dealer in the U.S.  And having personmally spent time competing against ComDoc, they are a reputable, “for real” dealer.  They have your typical assortment of services/solutions – including assessments and software (Equitrac, eCopy, PrintFleet,…). In fact, eCopy recognized ComDoc for having the “Best Sales Approach” at its 2008 eCopy Paper Connection forum.  This doesn’t make them an advanced BPO provider, capable of delivering ECM inter-galactically, but it’s not bad as far as dealers go.
  • Ohio is the Center of the Universe.  Yes, people in Ohio think it is.  However, if you have never competed day-in and day-out in Ohio, you have actually missed something.  Contrary to what you may think, there has been a lot of business going through that state. I’m not suggesting there should be mass hiring in Findlay, Youngstown, or Chillicothe.  But for any given docu-deal, it seemed like IKON, ComDoc, Gordon Flesch, Danka, Toshiba and Xerox all went to war.  And there was a lot of business going down in Ohio.  ComDoc appears to have pretty good reach too, covering OH, Western PA, WV, and Upstate NY.  I suppose its expansion into the Cincy market gives them easy access to Kentcky and Indiana too.  All this overlapping of coverage is confusing me, but that’s for Global and Xerox to figure out.
  • Global Expansion.  Many of us waited anxiously to see the eventual integration of Global into the Xerox empire (note that I did not say “evil” – I am just tired of the word “organization”), but quite frankly that has not happened. In fact, the word all along has been that Xerox wants to keep them separate, leveraging Global’s local business model, SMB focus, and sales hunger. Not just leverage it – but build on it.  That appears to be true: Including ComDoc, at least 8 Global acquisitions have been announced  after Xerox completed its acquisition of Global.  It’s also worth noting that it was a year ago, almost to the day, that Tom Salierno–former President and Chief Operating Officer for Ricoh U.S.–joined Global Imaging to head up acquisitions.

So what does this all mean?  Obviously it means that even with the economy tanking, the industry consolidation march continues.  Personally, I think this move seems to make sense, assuming the good people at “employee-owned” (now Xerox owned) ComDoc are happy with it. And given that it’s Global acquiring them and not Xerox directly, the business focus and company cultures should meld pretty well.  As you would expect, I have a number of questions that are still floating in my head:

  • Xerox/Global indicated that ComDoc would begin selling Xerox products. Does that mean they will [eventually] stop selling Ricoh and Sharp?
  • Was this a quiet, behind-the-scenes deal — or were others competing to acquire ComDoc?
  • Gordon Flesch is another big regional in the midwest – a Canon/Sharp solutions provider that has even a broader array of products, software and services.  Are they on someone’s radar?

This also means my phone will be ringing for the next few days as my friends at KMDI, competitors in the midwest (who know about ComDoc), and other people who watch and care about this stuff get all excited.  I’m not sure it warrants that level of excitement, but I did find this announcement to be at least interesting.

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