• The Wall Street Journal (subscription required), Tuesday, April 3, 2007 12:22 PM

Looking to tap into the small- and medium-business market, Xerox yesterday agreed to buy office-machines distributor Global Imaging Systems Inc. for $1.5 billion. At present, Xerox doesn't get a chance to bid on about 80% of all deals in that market.

As it has developed more competitive color laser printers and multifunction copiers, Xerox has wooed more dealers that sell to small business, with only limited success. "It's hard to organically build distribution," says CEO Anne Mulcahy.

Global Imaging currently sells the machines of Xerox competitors, including Canon and Ricoh. Xerox said that over time it expects that it will be able to displace many of the rival products with its own. But Canon, Ricoh and others could look for other distributors, potentially hurting its sales.

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