IKON Renews U.S. Lease Program Relationship With GE Capital Solutions
Press release from the issuing company
5/7/07 -- MALVERN, Pa.-- IKON Office Solutions, the world's largest independent channel for document management systems and services, today announced that it has entered into a Memorandum of Understanding ("MOU") with GE Capital Solutions to renew its existing lease program relationship in the United States, which is scheduled to expire in 2009.
Under the proposed transaction, the parties will extend their current lease program agreement through fiscal year 2014, and GE Capital Solutions will continue to serve as the Company's preferred financing source in the United States. In consideration of the renewal, the Company will be entitled to receive enhanced lease origination fees, while continuing to share in gains on lease-end activities.
The Company currently anticipates that the transaction will generate approximately $170 million to $200 million of aggregate incremental operating income during its fiscal years 2009 through 2014 compared to the renewal terms in the original agreement. The Company does not expect the renewal to have a material impact on its projected lease program financial results for fiscal year 2008. As a result of modifications to certain fee sharing arrangements under the renewal, the Company anticipates that the transaction will reduce its operating income during fiscal year 2007 by approximately $4 million compared to the sharing terms in the original agreement.
The transaction remains subject to the negotiation of mutually acceptable definitive agreements and approval by the parties' respective management and Board of Directors. The transaction is currently expected to close during the Company's third fiscal quarter ending June 30, 2007.
Fiscal Year 2007 Investor Conference
As a reminder, IKON will host its Fiscal Year 2007 Investor Conference on May 9, 2007 in New York City. The conference will be webcast and available on the Company's website at www.ikon.com under Calendar & Presentations.
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