Toshiba Tec Corp. (6588), the Japanese maker of scanners and bar-code machines, will acquire International Business Machines Corp. (IBM)’s point-of-sale terminal business for about $850 million in its biggest acquisition ever.
Toshiba Tec, 50 percent owned by TV and computer maker Toshiba Corp. (6502), will acquire the Retail Store Solutions business, the companies said in a joint statement today. The deal is expected to close late in the second quarter or early in the third quarter, subject to regulatory approvals, it said.
The transaction gives Toshiba a business that had revenue of about $1.15 billion last year and about 1,000 employees globally. Retailers use the point-of-sale systems, which include both hardware and software, to process and record transactions, manage inventory and collect and analyze data including customers’ purchasing trends.
“The purchase would strengthen Toshiba Tec’s core business,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo.
Toshiba Tec will use its own money to fund the purchase, spokesman Takashi Mizuno said by phone. The company had 82.05 billion yen ($1 billion) yen in cash and near cash as of Dec. 31, according to data compiled by Bloomberg.
Toshiba Tec rose 6.9 percent, the most in a month, to close at 327 yen in Tokyo trading after the Nikkei newspaper reported the deal earlier today. Toshiba was unchanged at 333 yen. IBM was little changed at $202.72 in New York trading yesterday.
“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,” Norio Sasaki, president at Toshiba, said in the statement.
Armonk, New York-based IBM, the world’s largest computer- services provider, is increasing its focus on software, cloud computing and emerging markets as part of a five-year plan that includes adding $20 billion in new revenue by 2015.
“It will have a major impact for Toshiba Tec,” said Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo. “Toshiba Tec will be able to expand its POS business with the acquisition, as IBM already has customers and can lure new ones with its brand.”
Toshiba Tec’s previous biggest takeover was a $315 million takeover of TEC Electronics in 1993, according to data compiled by Bloomberg.
Today’s deal comes as Toshiba and other Japanese consumer- electronics makers cope with slumping demand and a stronger yen. Toshiba in January cut its profit forecast by 54 percent for the year ended March 31.
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