csua.org/u/5e9 -> www.nytimes.com/2003/12/30/business/30CND-KINKO.html?ex=1082433600&en=65c1de81e4f4965e&ei=5070
GILPIN Published: December 30, 2003 he FedEx Corporation said today that it had agreed to acquire Kinkos, a privately held copy center operator, for $24 billion in cash in an effort to win more small business customers and enhance its competitive position with United Parcel Service , its main rival. FedEx is buying Kinkos from Clayton, Dubilier Rice, the private equity firm that controls the company. A fund managed by Clayton Dubilier made its first investment in Kinkos in 1996, when it acquired a 296 percent equity stake in the company. Kinkos operates roughly 1,200 stores worldwide and estimates its annual revenues as about $2 billion as of the end of this year.
FedExs relationship with Kinkos stretches back to 1988, when it became Kinkos exclusive shipping provider. After the purchase, FedEx will have full-service counters in all Kinkos stores. The FedEx and Kinkos combination will substantially increase our retail presence worldwide and will enable both companies to take advantage of growth opportunities in the fast-moving digital economy, Frederick W. Smith, FedExs chairman, president and chief executive, said in a statement. Our two companies share a similar background, culture and customer focus, and that common ground is extremely important as we prepare for future growth and success. Kinkos, which currently has 110 international locations, plans to significantly build on that platform, concentrating on growth opportunities in Asia, North American and Europe. FedEx, which serves 215 countries around the world, said it will use its own global expertise to aid in the international expansion. FedEx said the transaction, which will likely close in April, is not expected to have a material impact on its financial results in fiscal 2004. But the deal is expected to add to its to earnings in fiscal 2005, which begins June 1, 2004 the company said. Louis, sounded skeptical that Kinkos would provide much immediate help to the FedEx bottom line. Right now he is imagining becoming the back office for a host of small and medium-sized businesses. Broughton added, The unfortunate thing is that while he is a visionary, being the leading edge is also often the bleeding edge for the stock. While seeking to expand and diversify its own business base, analysts said that in some respects the Federal Express purchase is a defensive reaction to United Parcel Services recent acquisition by United Parcel Service of Mail Boxes Etc.
FedEx said it planned to retain most if not all of the more than 20,000 employees who work for Kinkos. It also said that Kinkos management was expected to remain in place and that the companys headquarters would remain in Dallas. Kinkos was founded in 1970 when Paul Orfalea, a recent college graduate, borrowed money to open a photocopy shop in Isla Vista, Calif. He called it Kinkos after the nickname his college friends gave him in recognition of his curly, reddish hair.
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