Not to knock our president, who seems to be doing an admirable job during his first five months in office (save for those individuals who stand to get dinged by a capital gains tax increase; they’re holding off on doing cartwheels), but perhaps the worst thing he could have done was strip off his mask and declare the age of mask-wearing to be over.
Certainly, it’s a good thing and a welcome gesture. But here in New Jersey, where Gov. Phil Murphy is the equivalent of the strictest of parents, the de-masking only caused confusion and frustration. Yes, Pennsylvania is taking off the masks; ditto for New York and Delaware. New Jerseyans feel like the youngsters going to bed at 8 p.m. on a summer night while the other kids are still playing outside.
It’s an inconvenience, a mental roadblock at best. As much as it stings, we take solace in knowing that masks will likely be history before the Fourth of July. Certainly, those individuals with underlying issues/pre-existing conditions will continue to don them for the foreseeable future, but the frustration and acrimony these seemingly harmless mitigation tools have created, and the accompanying psychological anguish (plus, the pro/anti factions that unfortunately became politicized) desperately need to go away.
But forget the masks for a minute. Ever hear a mysterious noise that precedes a stack of boxes falling, or the crackling of a chair, branch or tree that is about to break? Well, there are ominous noises coming from our end of the business community, and the crunching/smashing noise it’s about to release will be most welcome, because it means business activity is about to resume in a meaningful way.
The result? A slew of acquisitions, a bounty of partnerships and increased market activity is just around the corner. It’s actually closer than you think.
On the Horizon
“It’s not slow on our end,” said one industry amigo. “We are putting out press releases on new relationships with [redacted] to expand our offerings in cloud communications and should have a bigger announcement that I’m not allowed to share yet.”
Said another prominent dealer, who spoke to me recently on the subject of M&A for our June State of the Industry focus, “We have between four and six deals we’ll be announcing in the coming months.” And this was not an outlier. Another added, “We’ve been on the sidelines for quite a while, but that’s about to end.”
One deal that is not likely to happen is the CVC Capital acquisition of Toshiba Corp. Unlike the HP-Xerox saga from 2019-2020, this doesn’t have marquee names pushing for a deal to get done. In fact, only weeks after British-based CVC made its woo pitch public (much to Toshiba’s dismay…nothing like trying to fend off requests for “What do you make of the offer?” in real-time when the ink on the overture hasn’t had time to dry), the manufacturer deemed the nearly $21 billion offer unreviewable due to a lack of concrete details.
It should be noted that Toshiba America Business Solutions’ parent company is Toshiba Tec, which is listed independently on the Nikkei exchange. And while Toshiba Corp. is Toshiba Tec’s largest shareholder, there doesn’t seem to be any imminent movement for the time being.
“Since it was an unsolicited offer and the Toshiba board has decided to step aside, I don’t see anything happening very quickly,” noted Jim Kahrs of Prosperity Plus Management Consulting. “It’s similar to the Xerox unsolicited offer for HP—lots of press and talk throughout the industry, but nothing came of it. For this deal to go forward, the parties will need to engage in meaningful discussions, not just an exchange of letters.”
Inflation Caveat
While Toshiba has its hand in a lot of business ventures other than imaging solutions, seeing one of the major manufacturers garnering private equity attention is another welcome sign that times are good and about to get a lot better, as long as talk of inflation does not crimp post-pandemic plans. Even prior to the pandemic, some observers felt that an HP-Xerox type of coupling among manufacturers could be in the cards. As 2021 rolls on and OEMs assess both the damage and opportunities that exist on the back end, we could well see a major announcement in Q1 of 2022.
In conclusion, if President Biden’s unmasking did anything, it was to symbolically suggest that a return to normal is not far off. And judging by the murmurs throughout the industry, that normal just might include some fireworks. This is a breath of fresh air, in more ways than one. Stay tuned.
