'Number of targets in play' as Xerox identifies UK resellers to buy

Print giant's UK channel boss tells CRN why it continues to look for resellers to acquire

Xerox will be looking to make acquisitions "in the channel arena" rather than buying direct firms, with UK partners included in possible buyouts.

In February, the print giant said it will use a $100m (£75.5m) war chest it has set aside for M&A in 2017 to buy up and convert multi-branded resellers, both in the US and internationally.

Carlo Longhi, director and general manager, indirect channels UK and Ireland at Xerox, told CRN that process is continuing, with UK resellers being sighted as targets.

"It [channel acquisition] is a key part of our channel expansion programme. We will look at the market in Europe and locally in the UK. There is a separate team who make recommendations in terms of potential targets, who then deal with the global M&A team. There is then a process of due diligence," said Longhi.

"There will always be a number of targets in play either in the UK or Europe, but we do not comment on specific targets as we need to get to a conclusion around the due diligence, but absolutely there will be targets in the UK and Europe that will be considered. This is a constant process that is refreshed."

Longhi said while its channel acquisitions approach is not common among vendors, the firm is "very targeted" about whom it acquires.

"For example, the last two acquisitions we have done in the UK and Ireland - Concept [Group] and IBS [Irish Business Systems] - which were quite a few years ago now, were [acquired] to give us coverage in specific geographies. Moving forward it would be very much based on where we have gaps in terms of coverage and if there are specific segments or capabilities we want to acquire," he said.

"There would also need to be a cultural fit and be complementary to what we do rather than a substitution. Is it going to give us above and beyond what we already have?"

Longhi said Xerox does acquire on the direct side and has done in the past, but "today the channel is seen as the great growth engine, so if we acquire, we will be looking towards the channel arena."

He also claimed that bringing partners into the Xerox business does not produce any channel conflict or preferential treatment to the acquired firm.

"The organisations we have acquired in the past have been assimilated into the business and treated in the same way [as other partners], so it is a level playing field. The market space is significant and there is a lot of opportunity out there," he said.

"In any channel model you do get a degree of conflict, but in reality is it big? In the grand scheme of things it is minimal in terms of the amount of conflict that we get between partners, or channel versus direct coverage. We look at it case by case and manage it. What we can't do is restrict any channel partners in terms of coverage as clearly that is anti-competitive," he said.

Discussing Xerox's overall channel strategy, Longhi said it is continuing to expand organically too.

"Our channel strategy is about growth. It is about driving growth through our channel partners and recruiting more channel partners into the Xerox programme. Alongside this we are supporting our existing partners to grow their businesses and evolve in the SMB space.

"When we have recruited new partners they have looked to replace an existing vendor and in some cases it is about complementing what they already have," added Longhi.