IBM selling point-of-sale (POS) terminal business to Toshiba for US$850 million.

WorldWide Tech & Science. Francisco De Jesús.

IBM selling point-of-sale (POS) terminal business to Toshiba for US$850 million.

Toshiba unit plans to buy Big Blue's point-of-sale (POS) terminal business, which includes cash registers and related devices, for 68 billion yen (US$850 million).

IBM's technology will strengthen Toshiba's cloud computing services which enables stores, shoppers, manufacturers and others to exchange information and offer services, according to its statement Tuesday.

"The opportunities in retail store solutions are expected to grow by increasing demand in POS systems. In addition, demand for multi-channel integration and enhancement of store back office management accelerates further expansion of sales," Mamoru Suzuki, president and CEO for Toshiba, said in the statement.

Toshiba also aims to close the deal late in the second quarter or early in the third quarter of 2012.

A new holding company will be established in Japan and Toshiba Tec will acquire an 80.1 percent stake in the holding company, while IBM will hold a 19.9 percent stake, which it will gradually divest.

Currently, IBM holds the top spot in the global POS terminal market, with a share of 22 percent, while Toshiba, which will make the purchase is ranked fourth worldwide with a 7 percent market share, Reuters reported on Monday, citing the Nikkei.

In a statement Wednesday, Krista Macomber, computing practice analyst at TBR, noted that the deal will position Toshiba as a leader in worldwide POS revenue as it can now look beyond Japan to 33 additional markets that IBM has a presence in.

This will create opportunities for new revenue streams to be established internationally for the Japanese IT vendor, and enable it to target new vertical markets and a broader base of customers, she explained. Toshiba can leverage IBM's knowledge base and position itself to reap the benefits of IBM's Smarter Commerce initiative, too.

Press Release:

Toshiba Tec to Acquire IBM’s Retail Store Point-of-Sale Solutions Business,

Agreement Allows Both to Tap Growing Smarter Commerce Opportunity.

· Creates world's leading retail Point-of-Sale systems and solutions

business.

· Multi-year Business Partner agreement between IBM and Toshiba Tec

would integrate retail store solutions for Smarter Commerce.

· Transaction of approximately US$850 million

· Deal expected to close late in second quarter or early in third quarter of

2012

ARMONK, NY & Tokyo, JAPAN – April 17 2012: IBM(NYSE:IBM), the leader in

Smarter Commerce, and Toshiba Tec(TSE:6588), Japan's leading maker of

point-of-sale systems and related technology for retailers, today announced a

definitive agreement under which Toshiba Tec will acquire IBM’s Retail Store

Solutions (RSS) business, which offers retail point-of-sale (POS) solutions

worldwide. Upon completion of the transaction, Toshiba Tec would become the

world's foremost retail point of sale systems company, offering hardware,

software and integrated in-store solutions, and will team with IBM to bring the

Smarter Commerce experience to retailers and their customers worldwide.

The purchase price is approximately US$850 million (JPY: 68 billion).

As part of the transaction, Toshiba Tec will enter into a multi-year agreement with

IBM in which Toshiba Tec will become a IBM Premier Business Partner for

Smarter Commerce. This agreement will help ensure that IBM’s portfolio of

enterprise-level Smarter Commerce solutions and services, which extend from

the corporate data center to the local retail store, and Toshiba Tec's customerfacing

retail store point-of-sale solutions are available to customers worldwide to

meet the growing demand for multi-channel commerce.

It is expected that upon completion of the deal, Toshiba Tec, a subsidiary of

Toshiba, will acquire IBM’s Retail Store Solutions overall business operation

functions globally, including development, sales and related in-store maintenance.

Toshiba Tec's retail store point-of-sale solutions operation will benefit from a

worldwide distribution and sales network, enhanced product and solution

selection for customers, and decades of innovation by both companies.

The transaction is expected to close late in the second quarter or early in the

third quarter of 2012 subject to the satisfaction of regulatory requirements and

customary closing conditions. Subsequent closings will occur subject to similar

conditions, local agreements and the information and consultation process in

applicable countries.

Retailers, including those with global store operations, will benefit from

accelerated development of new products and solutions for regional and

geographic needs. Toshiba Tec customers also will benefit from a “one-stop

retail store solution” providing comprehensive support --planning, maintenance

and services -- to help them accelerate new store deployments worldwide.

In 2011, IBM announced a major Smarter Commerce initiative that helps

businesses automate and infuse intelligence into their procurement, marketing,

sales and customer service functions to better serve today's empowered online

consumer in the era of mobile and social networks. In a time when brands can

be built or broken across the Web within minutes --- and customers expect the

same quality experience from all channels --- businesses need to adapt with

technology that quickly responds or even anticipates customer needs across any

sales channel at any time.

"Together, IBM and Toshiba Tec represent the broadest multi-channel offerings

worldwide," said Craig Hayman, general manager, Industry Solutions, IBM

Software Group. "The pace of retail expansion requires a strategy to serve this

dynamic marketplace. This acquisition by Toshiba Tec creates not only the

world’s leading point-of-sale company, but also a key business partner for IBM in

its strategically important Smarter Commerce initiative. Retailers can invest with

confidence in the proven abilities of these two leaders to deliver multi-channel

commerce to more demanding consumers who want the same experience

shopping online, in-store, mobile, social or by any other means."

“The opportunities in retail store solutions are expected to grow by increasing

demand in POS systems. In addition, demand for multi-channel integration and

enhancement of store back office management accelerates further expansion of

sales,” said Mamoru Suzuki, President and CEO, Toshiba Tec. “Toshiba Tec

will become the world’s foremost Point-of-Sale provider capable of providing

products and services at the same level of high quality. It also will allow Toshiba

Tec to expand its global Point-of-Sales business through a combination of the

competitive product lineup and worldwide network proven by Toshiba Tec’s and

Retail Store Solutions history of the business.”

The acquisition will enable Toshiba Tec to seek expanded opportunities to deliver

new value to customers, including mass merchandisers, specialty and

convenience stores and fast food restaurants. Toshiba Tec also expects to

generate new retail business opportunities based on synergies with its printing

solutions business combined with Retail Store Solutions sales network.

“Toshiba warmly welcomes this agreement,” said Norio Sasaki, President and

CEO, Toshiba. “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. I

also expect this significant step to support innovation and the creation of new

business opportunities for Toshiba Group.”

While the transaction is being completed, the companies will continue to operate

independently. After the transaction closes, IBM will continue to provide

maintenance services to RSS clients under a multi-year services agreement.

Retail Store Solutions customer service and product availability will continue as

usual as the RSS operations are integrated.

Additional Transaction Details

A new holding company will be established in Japan. This company will hold the equity

of a number of companies organized in countries around the world. Toshiba Tec will

acquire an 80.1 percent stake in this holding company and in order to promote a smooth

transfer, IBM will hold a 19.9 percent stake in the holding company. Eventually, the

holding company will become a wholly owned subsidiary of Toshiba Tec. The new

companies, including the holding company, will continue to operate Retail Store

Solutions business worldwide as Toshiba Tec’s core retail point-of-sale solution affiliates.

Steven D. Ladwig, currently general manager, IBM Retail Store Solutions, will become

the chief executive officer (CEO) of the new US company with headquarters in Raleigh,

North Carolina.

A portion of the aggregate purchase price will be paid on the closing date and on the first

anniversary of the closing. The remaining portion will be paid on the third anniversary in

exchange for IBM’s 19.9 percent equity interest.

The IBM’s Retail Store Solutions revenue in 2011 was approximately $1.15 billion (US)

with approximately 1,000 employees worldwide plus maintenance specialists. Over time,

maintenance specialists may join the new companies subject to local business

conditions and completion of local information and consultation processes.

More information about IBM may be found at

http://www.ibm.com/smarterplanet/us/en/smarter_commerce/overview/

More information about the transaction may be found at

http://www.ibm.com/products/retail/announcement/index.html

More information about Toshiba Tec may be found at

http://www.toshibatec.co.jp/en/