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Suppliers Get In on the Merger/Alliance Action

November 1999
WILSONVILLE, OR—The commercial printing industry's suppliers and manufacturers seem to have caught the merger and alliance fever sweeping the printer side of the business, with a number of major names announcing acquisitions and alliances in recent weeks.

Notable among the announcements was Tektronix, which has reached an agreement to sell its Color Printing and Imaging Division to Xerox for $950 million. Xerox will set up a new business unit that adds Tektronix's color-printing technologies to Xerox's existing black-and-white workgroup printer offerings. Tektronix's color printer operations, with approximately 2,400 employees, will remain in this Portland suburb, and employees of the color printer division will become employees of Xerox.

Gerry Perkel, currently president of Tektronix's Color Printing and Imaging Division, will join the Xerox Channels Group as president of the Office Printing Business. The companies expect to close the transaction by the end of 1999.

The acquisition, the largest in Xerox's history, moves Xerox to a number-two position (behind Hewlett Packard) in the color network laser printer market, doubles Xerox's distribution network for printers and adds $725 million in color printer sales.

Rick Thoman, Xerox president and CEO, says the acquisition saves four or five years of market research and development, and brings Xerox's printer line sales to about $1 billion.

Thoman anticipates the color printer line to continue to grow at double-digit rates, and expects the color printer market to soar from about $2 billion to $6 billion in the next five years. "What this deal does is combine Tektronix's strong technology, wonderful time-to-market, very impressive management and technical group, along with Xerox brand and reach, and resources."

Meanwhile, Niles, IL-based Paragon Corporate Holdings and Mount Prospect, IL-based Multigraphics Inc., have entered into a definitive agreement to merge.

Paragon Corporate Holdings is the parent company of industry supplier A.B.Dick. The combination of A.B.Dick and Multigraphics will create an international manufacturer and distributor of equipment, supplies and services to the graphic arts industry, with combined annual revenues of approximately $300 million.

Paragon CFO Edward J. Suchma says the combined market and industry expertise of A.B.Dick and Multigraphics "creates a powerful force in the graphic arts industry."

The transaction is expected to close by the end of the year. Paragon Corporate Holdings acquired A.B.Dick in January 1997. Including Multigraphics, Paragon will have annual revenues of approximately $370 million.

And in the ink sector, Ann Arbor, MI-based Flint Ink has acquired all of the business and operating assets of The Ink Company, based in West Sacramento, CA.

The Ink Company manufactures inks and coatings for the newspaper, heatset web, sheetfed and package printing markets. Since its founding in 1977, it has built a system of mother plants and satellite operations.

The transition is expected to be completed with no interruption or delay in service to customers, officials say. Founded in 1920, Flint Ink operates nearly 100 facilities worldwide, employs approximately 3,200 people and had sales in excess of $1 billion in 1998.
 

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