Under the contract, InfoPrint Solutions will pay IBM $130 million per quarter during the first year of the deal, then $100 million per year for the remaining four years, said Kos Nista, IBM's VP for mergers and acquisitions.
IBM announced the sale of its Printing Systems Division for $725 million in cash to Ricoh on Thursday. IBM will initially own 49% of the joint venture, with Ricoh planning to acquire that stake over the next three years.
With a services contract in place that actually exceeds the value of the sale price, IBM appears to have done a good job in maximizing revenue from a unit that saw sales decline by 9% through the first three months of last year and that sold for a price that's actually less than its $1 billion in annual revenues.
Of course, as temporary part owner of InfoPrint Solutions, IBM will be for a time footing part of the bill for the services -- in effect paying itself. But the company's share of InfoPrint's expenses will diminish over time, along with the size of its ownership stake.