Xerox Buys Midwest MSP, Deal Is First In $100M Plan To Make Multi-Brand Resellers Xerox-Exclusive

Xerox's Global Imaging Systems (GIS) division has acquired an Ohio-based dealer of multivendor office equipment and managed print services in the first shot in its $100 million effort to convert multibrand solution providers into Xerox-exclusive partners.

The acquisition effectively kicks Xerox competitors Ricoh and HP off MT Technologies' line card in the midst of an A3 copier printer market share war.

The announcement of the deal for MT Business Technologies, of Mansfield, Ohio, comes less than four months after Xerox said it had set aside $100 million for mergers and acquisitions this year to convert more multi-brand dealers into Xerox-exclusive agents. Xerox, based in Norwalk, Conn., said GIS would spearhead that effort. Xerox values the multi-brand reseller space at $20 billion.

[RELATED: Xerox To Spend $100M In 2017 To Acquire More Multi-Branded Resellers, Get Into Emerging Markets]

MT was the largest independent seller of Ricoh products, and is also a partner of HP. Last month, Xerox's president of the company's U.S. channel unit told CRN that the office products vendor wants to grow its U.S. print-focused partners by 25 percent as it aims to penetrate the small to midsized business (SMB) market. The strategy? Convince partners that represent multiple brands to consider Xerox's broad portfolio and new open platform.

"Our coverage for our brand isn't enough," Darren Cassidy, president of Xerox's U.S. channel unit, told CRN. "We are spending a lot more money driving demand into the channel."

The Xerox all exclusive bid comes just one month after HP began shipping its highly anticipated A3 product. It marks the first time that HP has competed head-to-head with Xerox and Ricoh in what amounts to a $54 billion market opportunity.

HP said its A3 lineup delivers 20 to 30 percent lower cost than copier makers like Xerox and Ricoh with a smart predictive delivery software breakthrough that is head and shoulders above the Xerox and Ricoh partner model.

In a statement Monday announcing the deal, Xerox said the acquisition of MT opens new market opportunities in Ohio, including large metropolitan areas such as Cleveland and Columbus, offering Xerox growth potential.

’We’re joining forces with one of Ohio’s most respected office solutions companies,’ said Michael Pietrunti, senior vice president of acquisitions, corporate services and marketing for GIS, in the statement. ’This gives us the opportunity to expand our local network and generate increased revenue, while also providing more customers with industry-leading technology and innovative services to meet today’s business needs.’

Terms of the deal were not disclosed. MT's president, Chuck Rounds, who has been with the organization since 2000, will remain in that role after the acquisition is completed.

Xerox CFO Bill Osbourn earlier this year said the company plans to continue to buy independent, multi-branded resellers and convert them to resellers focused exclusively on Xerox. Those resellers typically only cost 1x their annual revenue and historically have provided a good return, he said.