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Canon bids €1.5bn for Dutch group
By Robin Harding in Tokyo
Published: November 16 2009 08:42 | Last updated: November 16 2009 08:42
Canon on Monday launched a €1.5bn takeover bid for Océ, the Dutch group, in a move that shows the ambition of office equipment makers to enter the market for professional printing.
Tsuneji Uchida, Canon’s president, said the acquisition “will contribute greatly to our goal of becoming the overall number one presence in the printing industry”.
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In depth: M&A - Jan-26China puts curbs on Panasonic Sanyo deal - Nov-04Professional printing is one of the main areas that Canon – best known for cameras and photocopiers – is targeting for its future growth. Improvements in technology mean that digital printing is now competitive with traditional offset printing for low-volume products such as brochures and specialist books.
Canon’s recommended bid of €8.60 per Océ ordinary share is a 70 per cent premium to Océ’s closing price on Friday and a 137 per cent premium to the average share price over the past 12 months.
Océ’s largest business is producing digital printers for tasks such as bank statements and marketing direct mail, and print shops. It also makes large format printers used for graphics and architectural plans and handles outsourced printing for institutions such as law firms. Outsourcing is a growing trend in the sector.
“This is the best possible combination in the consolidating global printing industry and will deliver scale in R&D, manufacturing and distribution,” said Rokus van Iperen, the chief executive of Océ.
Canon is offering €730m ($1.09bn) for the ordinary shares, €65m for preference shares that control 19 per cent of Océ’s votes, and will assume debt of €704m, giving the deal a total enterprise value of €1.5bn.
That equates to a multiple of 6.4 times Océ’s earnings before interest, tax, depreciation and amortisation last year of €234.7m. Canon is offering 1.24 times book value although Océ’s balance sheet carries a lot of goodwill.
Last year Océ made a net loss attributable to ordinary shareholders of €585,000 on sales of €2.9bn as a result of the economic slowdown and losses on disposals. Canon said it would finance the offer from its own resources.
Canon was advised by Mizuho Securities. ING advised Océ and Lazard advised Océ’s supervisory board.
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