Is HP Ready to Buy Another Mega Dealer? Why Not! Could It DEX Imaging? Marco? Could Konica Minolta All Covered Be Included?

About a week ago, I discussed on my daily YouTube show some thoughts regarding DEX Imaging and how I envision some possible acquisition alignments disrupting the (OED) office equipment dealers here in the U.S.

In this article, I want to elaborate more on HP Inc—DEX Imaging—MARCO—Konica Minolta U.S. Direct Operations and Konica Minolta's All Covered IT Services business unit. I will also share a few thoughts regarding the non-financially performing Visual Edge IT as a lesson to the industry's investors.

Let's start out discussing HP Inc.

It was November 2017. Here's a portion of HP's announcement of acquiring Apogee, the U.K. mega dealer—Europe's largest independent office equipment dealer. So, yes, HP Inc. does create subsidiaries with mega Dealers.

"PALO ALTO, Calif., November 1, 2018 – HP Inc. (NYSE: HPQ) today announced it completed the acquisition of Apogee Corporation, a U.K. based office equipment dealer (OED) and Europe's largest independent provider of print, outsourced services, and document and process technology. The transaction values Apogee at £380M."

Today's Dollar Value – $390 Million

Remember when HP Inc., after buying Samsung's print portfolio, had the ridiculous idea that they would be the great disruptor of the 50 – plus – billion - dollar A3 Marketplace?  Most would agree that HP Inc. has not in any way been the disruptor they dreamed of.

Digitalization has proven to be the disruptor to the print industry's A3 Office printing! Not HP Inc.

Well, it's 2025, and the print industry's office equipment dealers are experiencing the industry's greatest disruption as businesses move and retain more information behind glass. Digitalization and the benefits of cloud services have and continue to change the way all businesses work worldwide.

So, HP is obviously failing to meet its 2017 disruption goal. Is HP now thinking that taking control of distribution at street level is a viable strategy?

If so, which mega dealer in the U.S. marketplace is ripe for the picking? I would also ask which mega dealer has an aspiration to dominate the U.S. marketplace. Keep in mind that I believe those two mega dealer mindsets are not the same organization.

Let's discuss the mega dealer ripe for the picking! I believe that the organization is MARCO.

Back in 2015, MARCO was bought by the Wells Fargo private equity firm Norwest Equity Partners. Most would agree that a ten-year investment tenure for private equity is past due for selling. I have questioned many times why Norwest hasn't exited from MARCO.

Like others, MARCO's position as an IT services provider and print services provider with total revenues between 300 - 400 Million. MARCO has been in the IT services space for longer than any other private equity-owned dealer in the U.S.

Unfortunately, I think that MARCO's IT services platform is one built without a specific stack. As I have shared multiple times, I don't see any way for a mega dealer to deliver managed IT services as a do something for everyone platform.

Recently, the CEO of another mega dealer, Visual Edge IT, shared in an interview that he now recognizes the need to move upmarket to more valuable client engagements—something I have been preaching for ten years.

Of course, the relevance of my sharing the CEO of Visual Edge IT acknowledging his organization's needs to move upmarket to more valuable client contracts is based on the fact that Visual Edge IT is defined as a non-financially performing IT services organization. Back in the 3rd quarter of 2023, Ares Capital, the BDC lender to Visual Edge IT, wrote off a substantial senior subordinate loan that had been in nonaccrual for over a year.

Ares Capital wrote off 48 million dollars and took a preferred position in the company to compensate themselves for the losses associated with the remainder of the loan written off.

This disaster regarding Visual Edge IT is an important antidote to all those mega dealers attempting to do managed IT services without a clear understanding of the enormous cost associated with the deliverable.

In many of my The End Of The Day With Ray episodes, I have articulated the prolonged financial dysfunctions regarding Visual Edge IT and its relationship with its BDC Lender, Ares Capital. I do not see Visual Edge IT as a valuable strategic acquisition for anyone. I believe it would only be valuable as a liquidated entity.

Let's go back to DEX Imaging, an organization I have been discussing for years. In late 2018, I shared on my show a vision of either Office Depot or Staples buying a mega dealer, and in February 2019, Staples, in fact, bought DEX Imaging.

It wasn't long after that acquisition that the global COVID pandemic changed the industry forever. COVID-19 was the catalyst that delivered to the end-users of business print products, services, and supplies the realization that businesses can accomplish nearly all needed outcomes without the interference of printing and scanning.

Unfortunately, many actors in the industry are still denying the impact of COVID-19 on end-user awareness.

That vision I had of the many things a mega dealer owned by either Office Depot or Staples could do never materialized after Staples' Acquisition of DEX Imaging and the massive disruption caused by COVID-19.

I was screaming, "Why is DEX Imaging not doing e-commerce?" The world went home, and purchasing online exploded. Yet DEX Imaging and Staples were not collaborating in processes so that DEX Imaging customers could capitalize on Staples's online presence.

As time went by, my thinking regarding DEX Imaging changed. In 2022, I began discussing that Staples and DEX Imaging would separate, and the previous ownership of DEX Imaging would buy back their company from Staples. In April 2024, DEX Imaging's previous owners, along with Gamut Capital private equity, announced they had purchased DEX Imaging from Staples.

It's been nearly a year since DEX Imaging departed from Staples. The biggest news since then is that DEX Imaging is getting into IT services, which is a complete 180 in thinking from the owners' shared thoughts over the years regarding selling IT services.

When DEX Imaging announced the creation of DEXTEK, I was quick to discuss this on my show. DEX Imaging was doing what was needed to increase its value and reach markets outside its print services deliverable.

However, within days of my episode regarding DEXTEK, the DEXTEK leader was interviewed by ENX Magazine. In that interview, the DEXTEK leader discussed topics that I saw as alarming enough to do a follow-up episode in which I shared those concerns.

So, how does all this lead me to believe that MARCO and DEX Imaging will come together and that HP Inc. will be involved?

One thing I have learned over the years in this industry is that many times, the industry's actors have great intentions. However, alternative realities can easily hijack those intentions based on what seems like a comfortable means in the transition from a print-focused to an IT services-focused organization.

The reality is that there's nothing at all comfortable regarding a legacy print service provider becoming an IT services organization. I have been very outspoken on this issue throughout the last ten years through writings and, of course, on my YouTube Show, The End Of The Day With Ray!

I want to clarify that managed IT services can be delivered through print services organizations, which become managed services organizations, but not with the beliefs of the leader of DEXTEK, as I defined them in his interview in ENX Magazine.

Regardless of past examples of disasters or current disasters unfolding in front of the industry's eyes, private equity investors seem determined to succeed in a model that, to all logic, is a failed concept.

In saying that, here's my thinking regarding DEX Imaging with its DEXTEK and HP Inc acquiring MARCO.

HP Inc. and DEX Imaging acquiring MARCO changes a significant dynamic. That dynamic is debt. If HP Inc. formed a separate company with DEX Imaging and bought MARCO with cash, there would be no debt. This scenario is also an end-game strategy, allowing Gamut a quick exit and Norwest Equity a long overdue exit.

This new HP Inc. DEX Imaging company, along with DEXTEK, would create and control one of the largest direct distribution to end-user avenues in the U.S. marketplace. HP Inc. would also capitalize on delivering its compute products through this massive distribution arm.

HP Inc. has been a partner of MARCO for decades in print and computing products. It is also part of the DEX Imaging print deliverable. I recently heard that HP Inc. is or is going to manufacture a DEX Imaging MFP. This possible scenario seems so probable. However, I am not saying it would automatically be successful. Success will only be realized if both DEX Imaging and HP Inc. don't go too far away from reality.

Lastly, let's discuss how I see Konica Minolta and its U.S. direct business, along with All Covered, the Konica Minolta IT services business unit, falling into the hands of HP Inc., DEX Imaging, and MARCO.

In 2021, DEX Imaging bought ten Konica Minolta direct offices when Konica Minolta sold off some assets, presumably to cut costs. Everyone has been witnessing Konica Minolta's disastrous financial performance.

It is not too far-fetched to visualize HP Inc. and DEX Imaging acquiring the remaining U.S. direct operations along with All Covered, as most are expecting Konica Minolta to be liquidated due to years of mismanaged financial stewardship.

On Monday's episode of The End Of The Day With Ray, I will share my thoughts regarding Konica Minolta's first 9 months of FY ending 3/25.

The U.S. marketplace among the major private equity-backed dealers will see significant changes over the next couple of years. I expect DEX Imaging to be pivotal in these changes. There must be consolidation in the industry, and I also believe we will see OEMs take stakes in those changes. I do not see OEMs buying dealers as in the past. However, I do envision OEMs and mega dealers creating strategic subsidiary entities.

Thanks to all my LinkedIn followers and YouTube Subscribers.

Let's keep our minds open and prepared as possibilities become probabilities, and probabilities become reality quicker than ever.

Status quo is the killer of all that will be invented.

Ray Stasieczko Host of the industry's largest YouTube show, The End Of The Day With Ray!