(Editor’s note: This is the first in our two-part commentary and analysis of the DEX acquisition.)
On February 8, 2019, the word came out that Staples had signed an agreement to acquire DEX Imaging. As the news broke it shook up the industry and organizations, including manufacturers and vendors of all stripes. Those with the deepest concerns where those who had partnered with DEX, such as Canon, HP and Konica Minolta.
According to the release, Dan Doyle, Jr., president and CEO of DEX Imaging, Dan Doyle, Sr., chairman of DEX Imaging, and their existing executive team will continue to lead the business going forward. That settles the leadership issue and speaks well for the success of this rather significant acquisition/merger.
It is obvious that Staples did not acquire DEX so that it could remain a regional player. If we are correct then the hardware companies such as Canon, HP, and Konica Minolta will be asked to provide product across the entire country. Frankly, we do not see that as a likely occurrence. If Fujifilm wins their legal battle with Xerox it could be the beginning of a beautiful relationship with Staples.
Based on the assumption that either Fujifilm wins or Xerox disintegrates, the latter may be the best option for Staples. DEX’s current hardware providers will find it virtually impossible to go nationwide without destroying the integrity of their distribution. At least that was our initial impression. Upon reflection and some discussion with Sam Yoshida, executive vice president & GM, Business Information Communications Group, Canon U.S.A., he shared some interesting observations about the acquisition.
His analysis may prove to be the correct one. He indicated that Staples has been looking to do something much broader than the range of copier, printer, and scanner products it currently sells. The big inhibitor was the lack of a service capability, and they have it now.
In addition, at one time Danka provided the production print product for Staples. If I were a betting man, I would lay 9 to 5 that the current provider (Xerox) will be out the door as soon as that contract runs out. You could see either Canon or Konica Minolta high-speed devices performing in the Staples store near you. Or it could be a combination of the two. Of course, my crystal ball is foggy, and we are not sure if or when that will come to pass.
DEX could also provide the expertise and talent to implement a nationwide MPS program along with a Managed IT division. When you think of DEX you must recognize the proven capability of the Doyles. They are highly intelligent, aggressive and know this game from top to bottom.
We also believe that Staples/DEX can pick up the acquisitions, only this time more broadly than regionalized. The options are all in play here. Dan, Sr., like me, is an octogenarian and how much more is he up to doing? Our opinion is Dan Jr. becomes the driving force behind this acquisition/merger.
One thing we can say is that this business is never boring. The next few years will be something very special.
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