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IBM selling point-of-sale (POS) terminal business to Toshiba for US$850 million.
Toshiba unit plans to buy Big Blue's point-of-sale (POS) terminal business, which includes cash registers and related devices, for 68 billion yen (US$850 million).
IBM's technology will strengthen Toshiba's cloud computing services which enables stores, shoppers, manufacturers and others to exchange information and offer services, according to its statement Tuesday.
"The opportunities in retail store solutions are expected to grow by increasing demand in POS systems. In addition, demand for multi-channel integration and enhancement of store back office management accelerates further expansion of sales," Mamoru Suzuki, president and CEO for Toshiba, said in the statement.
Toshiba also aims to close the deal late in the second quarter or early in the third quarter of 2012.
A new holding company will be established in Japan and Toshiba Tec will acquire an 80.1 percent stake in the holding company, while IBM will hold a 19.9 percent stake, which it will gradually divest.
Currently, IBM holds the top spot in the global POS terminal market, with a share of 22 percent, while Toshiba, which will make the purchase is ranked fourth worldwide with a 7 percent market share, Reuters reported on Monday, citing the Nikkei.
In a statement Wednesday, Krista Macomber, computing practice analyst at TBR, noted that the deal will position Toshiba as a leader in worldwide POS revenue as it can now look beyond Japan to 33 additional markets that IBM has a presence in.
This will create opportunities for new revenue streams to be established internationally for the Japanese IT vendor, and enable it to target new vertical markets and a broader base of customers, she explained. Toshiba can leverage IBM's knowledge base and position itself to reap the benefits of IBM's Smarter Commerce initiative, too.
Press Release:
Toshiba Tec to Acquire IBM’s Retail Store Point-of-Sale Solutions Business,
Agreement Allows Both to Tap Growing Smarter Commerce Opportunity.
· Creates world's leading retail Point-of-Sale systems and solutions
business.
· Multi-year Business Partner agreement between IBM and Toshiba Tec
would integrate retail store solutions for Smarter Commerce.
· Transaction of approximately US$850 million
· Deal expected to close late in second quarter or early in third quarter of
2012
ARMONK, NY & Tokyo, JAPAN – April 17 2012: IBM(NYSE:IBM), the leader in
Smarter Commerce, and Toshiba Tec(TSE:6588), Japan's leading maker of
point-of-sale systems and related technology for retailers, today announced a
definitive agreement under which Toshiba Tec will acquire IBM’s Retail Store
Solutions (RSS) business, which offers retail point-of-sale (POS) solutions
worldwide. Upon completion of the transaction, Toshiba Tec would become the
world's foremost retail point of sale systems company, offering hardware,
software and integrated in-store solutions, and will team with IBM to bring the
Smarter Commerce experience to retailers and their customers worldwide.
The purchase price is approximately US$850 million (JPY: 68 billion).
As part of the transaction, Toshiba Tec will enter into a multi-year agreement with
IBM in which Toshiba Tec will become a IBM Premier Business Partner for
Smarter Commerce. This agreement will help ensure that IBM’s portfolio of
enterprise-level Smarter Commerce solutions and services, which extend from
the corporate data center to the local retail store, and Toshiba Tec's customerfacing
retail store point-of-sale solutions are available to customers worldwide to
meet the growing demand for multi-channel commerce.
It is expected that upon completion of the deal, Toshiba Tec, a subsidiary of
Toshiba, will acquire IBM’s Retail Store Solutions overall business operation
functions globally, including development, sales and related in-store maintenance.
Toshiba Tec's retail store point-of-sale solutions operation will benefit from a
worldwide distribution and sales network, enhanced product and solution
selection for customers, and decades of innovation by both companies.
The transaction is expected to close late in the second quarter or early in the
third quarter of 2012 subject to the satisfaction of regulatory requirements and
customary closing conditions. Subsequent closings will occur subject to similar
conditions, local agreements and the information and consultation process in
applicable countries.
Retailers, including those with global store operations, will benefit from
accelerated development of new products and solutions for regional and
geographic needs. Toshiba Tec customers also will benefit from a “one-stop
retail store solution” providing comprehensive support --planning, maintenance
and services -- to help them accelerate new store deployments worldwide.
In 2011, IBM announced a major Smarter Commerce initiative that helps
businesses automate and infuse intelligence into their procurement, marketing,
sales and customer service functions to better serve today's empowered online
consumer in the era of mobile and social networks. In a time when brands can
be built or broken across the Web within minutes --- and customers expect the
same quality experience from all channels --- businesses need to adapt with
technology that quickly responds or even anticipates customer needs across any
sales channel at any time.
"Together, IBM and Toshiba Tec represent the broadest multi-channel offerings
worldwide," said Craig Hayman, general manager, Industry Solutions, IBM
Software Group. "The pace of retail expansion requires a strategy to serve this
dynamic marketplace. This acquisition by Toshiba Tec creates not only the
world’s leading point-of-sale company, but also a key business partner for IBM in
its strategically important Smarter Commerce initiative. Retailers can invest with
confidence in the proven abilities of these two leaders to deliver multi-channel
commerce to more demanding consumers who want the same experience
shopping online, in-store, mobile, social or by any other means."
“The opportunities in retail store solutions are expected to grow by increasing
demand in POS systems. In addition, demand for multi-channel integration and
enhancement of store back office management accelerates further expansion of
sales,” said Mamoru Suzuki, President and CEO, Toshiba Tec. “Toshiba Tec
will become the world’s foremost Point-of-Sale provider capable of providing
products and services at the same level of high quality. It also will allow Toshiba
Tec to expand its global Point-of-Sales business through a combination of the
competitive product lineup and worldwide network proven by Toshiba Tec’s and
Retail Store Solutions history of the business.”
The acquisition will enable Toshiba Tec to seek expanded opportunities to deliver
new value to customers, including mass merchandisers, specialty and
convenience stores and fast food restaurants. Toshiba Tec also expects to
generate new retail business opportunities based on synergies with its printing
solutions business combined with Retail Store Solutions sales network.
“Toshiba warmly welcomes this agreement,” said Norio Sasaki, President and
CEO, Toshiba. “Toshiba Tec enjoys a strong presence in retail store solutions in
Asia-Pacific, including Japan, and we are confident that this acquisition will
support expansion in North America, Europe and the emerging economies. I
also expect this significant step to support innovation and the creation of new
business opportunities for Toshiba Group.”
While the transaction is being completed, the companies will continue to operate
independently. After the transaction closes, IBM will continue to provide
maintenance services to RSS clients under a multi-year services agreement.
Retail Store Solutions customer service and product availability will continue as
usual as the RSS operations are integrated.
Additional Transaction Details
A new holding company will be established in Japan. This company will hold the equity
of a number of companies organized in countries around the world. Toshiba Tec will
acquire an 80.1 percent stake in this holding company and in order to promote a smooth
transfer, IBM will hold a 19.9 percent stake in the holding company. Eventually, the
holding company will become a wholly owned subsidiary of Toshiba Tec. The new
companies, including the holding company, will continue to operate Retail Store
Solutions business worldwide as Toshiba Tec’s core retail point-of-sale solution affiliates.
Steven D. Ladwig, currently general manager, IBM Retail Store Solutions, will become
the chief executive officer (CEO) of the new US company with headquarters in Raleigh,
North Carolina.
A portion of the aggregate purchase price will be paid on the closing date and on the first
anniversary of the closing. The remaining portion will be paid on the third anniversary in
exchange for IBM’s 19.9 percent equity interest.
The IBM’s Retail Store Solutions revenue in 2011 was approximately $1.15 billion (US)
with approximately 1,000 employees worldwide plus maintenance specialists. Over time,
maintenance specialists may join the new companies subject to local business
conditions and completion of local information and consultation processes.
More information about IBM may be found at
http://www.ibm.com/smarterplanet/us/en/smarter_commerce/overview/
More information about the transaction may be found at
http://www.ibm.com/products/retail/announcement/index.html
More information about Toshiba Tec may be found at
http://www.toshibatec.co.jp/en/
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