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The financial report card

Danka and Global Imaging are no carbon copies

Danka Business Systems had been selling and servicing office equipment for 17 years when Tom Johnson, a Danka executive, broke away in 1994 to create a competitor, Global Imaging Systems. • Though the two Tampa Bay area companies were trying to make money in the same dull but indispensable business — keeping the world's paperwork flowing — they went about it in distinctly different ways. • Polar opposites in style and strategy, Danka and Global Imaging both eventually became acquisition targets of the giant equipment makers whose products they sold. But key corporate differences translated into big-dollar differences when buyout offers came along, for Global last year from Xerox and this week for Danka from Konica Minolta. • Here's a scorecard that tallies the tale of two similar, yet wildly divergent, Tampa Bay area companies.

The business model

Danka, under the hard-driving direction of co-founder Dan Doyle, went after flashy mega-accounts and gobbled up hundreds of competitors worldwide, rebranding them with the Danka name.

Despite its name, Global Imaging stayed in the United States, targeted mid-sized customers and made acquisitions selectively, letting them keep their local identities.

The executives

"We're looking to grow this business to $5-billion in revenues by the year 2000. So when you look at it that way, we're going to need all the people we can get."

Dan Doyle, after announcing plans to buy Eastman Kodak's copier business for $588-million in late 1996. He left Danka in 1998.

"Drunken sailors on shore leave can buy companies. But acquisitions are more serious than that."

Tom Johnson, Global Imaging's founder and chief executive, after buying 80 companies in 11 years.

The financial report card

For the fiscal year ended March 31, 2007, Danka lost $29.2-million on sales of $450-million. It had 45,000 customers in the United States, having sold off its overseas businesses.

Global Imaging had a profit of $61.9-million on $1-billion in sales for the fiscal year ended March 31, 2006. It had about 185,000 customers.

The endgame

After 31 years in business, Danka agreed this week to be acquired by Konica Minolta Business Solutions for $240-million. The payout will barely scratch the surface of Danka's debt and give its shareholders 10 cents a share, if they're lucky. Konica said it will keep Danka's 2,000 workers, including about 300 in the St. Petersburg area, though top executives will depart. The Danka name, meanwhile, will likely be phased out over time.

Xerox paid $1.5-billion for Global Imaging last year, generating $29 a share for the company's shareholders. Global's top executives stayed on board, as did its 4,500 employees, including 45 in Tampa. Xerox is now said to be adjusting to "Global Time," a reference to its new subsidiary's speed and flexibility.

Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.



Danka and Global Imaging are no carbon copies 04/10/08 [Last modified: Wednesday, April 16, 2008 2:19pm]

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