RICOH to Acquire IKON Office Solutions, Inc.

TOKYO, Aug. 27 /PRNewswire/ -- Ricoh Company, Ltd. (TSE: 7752, "RICOH")
(President & CEO: Shiro Kondo) today announced that it has reached a
definitive agreement with IKON Office Solutions, Inc. (NYSE: IKN, "IKON") to
acquire IKON (the "Transaction") through RICOH's wholly owned U.S.
distribution subsidiary, Ricoh Americas Corporation ("RAC"). The Transaction
is supported by both RICOH and IKON and has been approved by the Boards of
Directors of the respective organizations.
1. Background
RICOH (headquartered in Tokyo, Japan) is a global leader in imaging
solutions that has brought to the market innovations such as digitalization,
network solutions, and colorization. In the rapidly growing printing and
document solution areas, RICOH's challenge has been to strengthen its channels
for assessing customers' potential needs and making appropriate proposals
based on a customer-driven approach. In the extremely competitive U.S. market,
RICOH is committed to further strengthening its sales and support channels.
As the world's largest independent channel for document management systems
and services, IKON (headquartered in Malvern, Pennsylvania) supplies and
services a wide range of office equipment, such as MFPs (multi-function
printers), fax machines and printers, in the U.S., Canada and the Western
European markets. With over 400 sales and service locations, IKON has a long
track record with Fortune 500 companies among its customers. RICOH has been a
key supplier to IKON, and the relationship between the two companies has a
long history. In addition, IKON also provides professional services and
document outsourcing services to a wide variety of customers.
"IKON has terrific strength in areas that complement RICOH's growth
strategy," said Shiro Kondo, President and CEO of Ricoh Company, Ltd. "IKON
has advanced Professional Services capabilities with a long list of satisfied
large customers. IKON is respected as well for its production print sales and
service expertise. We are excited to add the very experienced IKON management
team and the thousands of skilled and dedicated IKON employees to the RICOH
family."
IKON Chairman and Chief Executive Officer, Matthew J. Espe, said,
"Following an extensive review of our strategic opportunities, our Board
conducted a formal process to evaluate alternatives for the Company, and has
approved this attractive transaction for our shareholders, customers and
employees. The offer represents a 33% premium over IKON's trailing 60-day
average stock price as of market close on August 26th. In addition, combining
with RICOH, one of the world's most respected and innovative companies, will
enable us to strengthen our offerings to customers and create new
opportunities for our employees."
Espe concluded, "We remain fully committed to providing the highest
quality of support and service to all our customers."
As a result of the Transaction, RICOH will strengthen its business
infrastructure in the U.S., Canada and Europe by combining with IKON's strong
sales and service network. RICOH also will gain access to IKON's customer
base, which includes major account customers and government and public sectors
in the U.S. This acquisition is yet another step in RICOH's integrated global
growth strategy.
2. Acquisition Price:
Target: IKON Office Solutions, Inc. (See Appendix)
Estimated Acquisition Price: U.S. $1.617 billion (approx. JPY 172.1
billion)(*1) based on an offer of $17.25 per share. This price is a 33%
premium over the average daily closing price of the past 60 days until August
26th. After careful analysis and review of IKON's assets, business operations
and prospects, RICOH considers that this price is fair and reasonable.
(*1) Exchange rate is $1 = JPY106.42, unless otherwise noted.
Finance: RICOH will finance the Transaction with a mix of its own and
external funding.
3. Acquisition Process
The Transaction will be implemented by merging an acquisition subsidiary
wholly owned by RAC, Keystone Acquisition, Inc., with and into IKON.(*2) The
merger requires the approval of the majority of IKON's outstanding shares at
its shareholder meeting and will result in IKON continuing as the surviving
company. Through this process, RAC will acquire all of the outstanding shares
of IKON from IKON's shareholders ($17.25 in cash per share). The Transaction
is subject to approval of North American and European antitrust authorities.
The parties intend and expect to expeditiously complete the process during the
fourth quarter of calendar 2008.
(*2) This process is referred to as a reverse triangular merger in the
U.S.
4. Impact on financial results of RICOH
The specific impact of the Transaction on RICOH's consolidated financial
results for the fiscal year ending March 2009 will be disclosed when
appropriate.
About RICOH
A global leader in digital office solutions, RICOH (www.ricoh.com) creates
new value at the interface of people and information, offering a broad range
of digital, networked products, including MFPs, printers, fax machines,
semiconductor related products and digital cameras. With 83,400 employees
worldwide, and $22 billion in revenue, RICOH is also one of the world's
leading environmentalist companies, committed to sustainable business
everywhere.
About IKON
IKON Office Solutions, Inc. (www.ikon.com) is the world's largest
independent channel for document management systems and services, enabling
customers to improve document workflow and increase efficiency. IKON
integrates best-in-class copiers, printers and MFP technologies from leading
manufacturers and document management software and systems, to deliver
tailored, high-value solutions implemented and supported by its global
services organization -- IKON Enterprise Services. With fiscal year 2007
revenue of $4.2 billion, IKON has approximately 24,000 employees in over 400
locations throughout North America and Western Europe.
Forward Looking Statements
This announcement, including information included in or incorporated by
reference into this announcement, may contain "forward-looking statements"
concerning RICOH and IKON. Generally, the words "will", "may", "should",
"continue", "believes", "expects", "intends", "anticipates" or similar
expressions identify forward-looking statements. The forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from those expressed in the forward-looking statements. Many
of these risks and uncertainties relate to factors that are beyond the
companies' abilities to control or estimate precisely, such as future market
conditions and the behaviors of other market participants, and therefore undue
reliance should not be placed on such statements. Examples of forward-looking
statements in this press release include, but are not limited to, statements
regarding the proposed acquisition of IKON by RICOH, such as the results of
the review of the Transaction by regulatory agencies, and any conditions
imposed in connection with consummation of the Transaction; approval of the
Transaction by the shareholders of IKON; and satisfaction of various other
conditions to the closing of the Transaction. RICOH and IKON assume no
obligation to update these forward-looking statements, except as required
pursuant to applicable law.
Additional Information and Where to Find It
Investors and security holders are urged to read the proxy statement
regarding the business combination transaction referred to in the foregoing
information, when it becomes available, because it will contain important
information. The proxy statement will be filed with the Securities and
Exchange Commission by IKON. Investors and security holders may obtain a free
copy of the proxy statement (when it is available) and other documents filed
by IKON with the SEC at the SEC's website at www.sec.gov. The proxy statement
(when it is available) and these other documents may also be obtained for free
from IKON by directing a request to Maryanne Messenger in Shareholder Services
at 1-610-296-8000.
Certain Information Concerning Participants
Investors may obtain a detailed list of names, affiliations and interests
of the IKON participants in the solicitation of proxies of shareholders to
approve the proposed business combination from the proxy statement filed with
the SEC (when it is available).
Contact (Japan):
Francis Harrison
Ricoh Company, Ltd.
Mobile: +81 90 6702 7302
Tel: +81 3 (6278) 4550
Francis.harrison@nts.ricoh.co.jp

Contact (US):
Ron Potesky
Ricoh Americas Corporation
Tel: +1 973 882 2106
Ron.potesky@ricoh-usa.com

Contact (Europe):
Javier Diez-Aguirre
Ricoh Europe PLC
Tel: +44 (0) 20 7465 1204
press@ricoh-europe.com

(Appendix)

Overview of IKON

Name of Corporation: IKON Office Solutions, Inc.
Location: Malvern, Pennsylvania USA
Overview of Business: Distribution, support and service of MFPs,
fax, printers and other office equipment,
managed and professional services
Fiscal Year End: End of September
Shareholders' Equity: $1,454MM (As of June 30th, 2008)
Total Shares Outstanding: 93,756,635 Shares (As of July 30th, 2008)
Consolidated Revenue: $4,168MM (Fiscal Year ending in
September 2007)
Consolidated Total Assets: $3,019MM (As of June 30th, 2008)
Management: Chairman and Chief Executive Officer
Matthew J. Espe
Senior Vice President and Chief Financial
Officer Robert F. Woods
Employees: Approximately 24,000 (As of June 30, 2008)
Locations: Over 400 in North America and Western
Europe
Relationship Between Buyer and Target:
Capital Ties: None
Personnel Relationship: None
Business Relationship: RICOH supplies MFPs, printers and fax
to IKON

Historical Earnings (Consolidated):

(Unit: $MM) FYE 9/2005 FYE 9/2006 FYE 9/2007
Revenue 4,377 4,221 4,168
Operating Income 156 194 203
Net Income 61 101 114
Total Assets 3,832 3,231 3,271
Shareholders' Equity 1,570 1,681 1,706

SOURCE Ricoh Company, Ltd.

Japan, Francis Harrison of Ricoh Company, Ltd., Mobile, +81-90-6702-7302,
+81-3(6278)4550, Francis.harrison@nts.ricoh.co.jp; or US, Ron Potesky of Ricoh
Americas Corporation, +1-973-882-2106, Ron.potesky@ricoh-usa.com; or Europe,
Javier Diez-Aguirre of Ricoh Europe PLC, +44(0)20-7465-1204,
press@ricoh-europe.com