IBM Corp. said Thursday that Japanese printer company Ricoh Co. has agreed to acquire a 51 percent stake in IBM's printing systems division and will eventually take full ownership of the business in three years.
Under the terms of the deal, IBM will receive $725 million (euro558.6 million) cash, covering the initial 51 percent and a prepayment on the remaining 49 percent. The total also includes a management fee of $35 million (euro27 million). This transaction is expected to close in the second quarter of this year.
The price for the remainder of the venture will be determined after three years.
"IBM and Ricoh have both benefited from a strong relationship for many years, and this agreement is a natural extension of that relationship," said Samuel J. Palmisano, IBM's chairman, president and chief executive, in a statement. "The eventual transfer of the IBM Printing Systems Division to Ricoh enables IBM to continue to refine its focus on its strategic businesses and the clients of those businesses."
The companies will form a new company, called InfoPrint Solutions Co., that is expected to begin operations with about 1,200 employees. The headquarters will be located in Boulder, Colorado.