FedEx Calls Kinko's An Ideal Fit
MEMPHIS, TN—Kinko's has long since shed its image as a copy center, as its recent acquisition by delivery stalwart FedEx completes its migration into a full business services provider.
The $2.4 billion cash deal, reached as 2003 came to an end, is yet another example of the synergy craze as businesses continue to look for fiscal companionship in the face of continuing U.S. economic uncertainty despite signs of growth.
"The FedEx and Kinko's combination will substantially increase our retail presence worldwide and will enable both companies to take advantage of growth opportunities in the fast-moving digital economy," notes Frederick W. Smith, chairman, president and CEO of FedEx Corp. "Our two companies share a similar background, culture and customer focus, and that common ground is extremely important as we prepare for future growth and success."
Even though FedEx has been the exclusive shipping provider since 1988, once the deal is completed, it will allow all 1,200 Kinko's locations worldwide to offer new or expanded FedEx shipping options to small- and medium-sized businesses, as well as to corporate customers. Currently, only 134 stores have staffed FedEx counters. The result will be an increase in FedEx Ground retail access in the United States and Canada, and will also improve the retail presence for FedEx Express in key international markets.
"The Kinko's acquisition will help diversify the FedEx revenue base, driving better value for our shareholders," says Alan B. Graf Jr., executive vice president and CFO of FedEx Corp. "This strategic business fit also contributes to FedEx's long-term financial goals of increasing earnings, cash flow and returns. We believe this combination will strengthen our competitive position in the marketplace."