IBM selling retail sales technology unit to Toshiba

Posted April 17, 2012 11:53 a.m. EDT
Updated April 17, 2012 6:33 p.m. EDT

— IBM (NYSE: IBM) on Tuesday announced its plans to sell its Retail Store Solutions unit, which employs about 650 people in the Triangle, to a subsidiary of Japan-based Toshiba Corp. for $850 million.

The RSS unit produces and supports point-of-sale systems for retailers worldwide. It generated about $1.15 billion in revenue last year.

There was no word on any impact to RSS employees, although IBM and Toshiba TEC Corp. will form a holding company in Japan to oversee point-of-sale operations globally. U.S. operations for the holding company will be based in Raleigh and led by Steven Ladwig, the general manager of RSS for IBM.

Toshiba TEC will buy out IBM's 19.9 percent stake in the holding company after three years, officials said.

Once the RSS sale is completed in the early third quarter, Toshiba will become the global leader in point-of-sale systems, officials said.

As part of the transaction, Toshiba TEC Corp. will enter into a multi-year agreement with IBM in which Toshiba TEC will become a partner for IBM's Smarter Commerce initiative, officials said. Big Blue launched the effort last year to help businesses automate and infuse intelligence into their procurement, marketing, sales and customer service functions, making them more agile in the era of informed online customers and mobile and social networks.

"Together, IBM and Toshiba TEC represent the broadest multi-channel offerings worldwide," Craig Hayman, general manager of industry solutions for IBM Software Group, said in a statement. "The pace of retail expansion requires a strategy to serve this dynamic marketplace. This acquisition by Toshiba TEC creates not only the world’s leading point-of-sale company, but also a key business partner for IBM in its strategically important Smarter Commerce initiative. Retailers can invest with confidence in the proven abilities of these two leaders to deliver multi-channel commerce to more demanding consumers who want the same experience shopping online, in-store, mobile, social or by any other means."

Toshiba TEC said it plans to use the RSS unit and its printing business to create business opportunities in the retail market, from mass merchandisers to convenience stores to fast-food restaurants.

“The opportunities in retail store solutions are expected to grow by increasing demand in (point-of-sale) systems. In addition, demand for multi-channel integration and enhancement of store back-office management accelerates further expansion of sales,” Mamoru Suzuki, Toshiba TEC president and chief executive, said in a statement.