Partners: Potential Xerox Deal With Fujifilm Could Be A Competitive Boon To Both Sides

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Xerox and Fujifilm Holdings Corporation are negotiating a significant investment deal that could involve Fuji taking a controlling interest in the printing giant, according to The Wall Street Journal.

While specific details of the deal remain unclear – The Journal writes that "an array of possible deals" are on the table – a full takeover is not expected to be under consideration, per the report, and a transaction is not expected to take place in the immediate future.

Xerox partners who spoke with CRN said the agreement if reached, would tighten an already-longstanding relationship between the Norwalk, Conn.-based document company and Fujifilm, which have co-owned joint venture partnership Fuji Xerox since 1962. The business entity develops, manufactures and distributes document processing products in the Asia-Pacific region.

[Related: Xerox Partners Support Jacobson, Call Icahn's Complaints 'Short-Sighted']

Tokyo-based Fujifilm, although known for selling film and cameras, derives a significant portion of its revenue from diagnostic and imaging equipment sales to medical and pharmaceutical companies, according to Bloomberg. Xerox, in addition to its ConnectKey line of printing products, also provides an array of document services, including managed print.

Troy Tafoya, president of Fort Collins, Colo.-based Professional Document Solutions, doesn't see any downside to an enhanced alliance between the two companies. The combination of Xerox's ConnectKey software with Fuji's strong A3 and A4 product lines is appealing, he said, and it could help Xerox from a competitive perspective.

"If they're more tied at the hip, they're going to have more control over them not putting devices in competitors' hands," Tafoya said. "I think it's a good thing. Xerox is going in the right direction. I like the products they have, and a lot of those products are from Fuji."

Patrick Leone, founder and CEO of Bloomington, Ind.-based MidAmerica Technology and developer of the SignMe app, said he thinks the addition of Fuji or another potential buyer would be an exciting component Xerox's go-to-market model.

"I would hope the innovative thinking of the partners is valuable to Fuji," Leone said. "It's going to be a big year for apps and partners building on Xerox's app platform. I would think that would be a big positive for Fuji."

Leone added that Fuji Xerox seems to maintain a focus on color production engine development. Xerox materials note that the entity has gained significant R&D responsibilities of late.

Reports of the deal come just one month after Carl Icahn supporter Jonathan Christodoro resigned from the Xerox board of directors, citing disagreement with other board members over Xerox's strategic direction.

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