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Contex buys IDEAL's Scanner and Systems Division.

IDEAL ScanCENTRAL X36
MFP ScanCENTRAL from IDEAL -
but will it be available from Contex?

The juciest rumour circulating the wide format scanning industry this last week has been that Contex had bought IDEAL, their successful US distributor. Or was it IDEAL had bought Contex?

Scanners4CAD can now put an end to the rumour. We confirm that by mutual agreement IDEAL has sold its large format Scanner Division to Contex Scanning Technology Inc for an undisclosed sum.

Contex's rivals seem unperturbed by this development. Most say Contex's US distributors Promark and Tekgraf have the most to worry about. They say resellers buying Contex scanners from Promark and Tekgraf will be asking if IDEAL's (now Contex's) resellers get a better deal than they do. Contex will have to move quickly, they say, to level the playing field for Promark, Tekgraf, GTCO Calcomp and Vidar, etc. Is a two-tier reseller system where favored Contex resellers take on the rest now inevitable in the USA?

Out goes IDEAL!
IDEAL, who only recently moved their Scanner and Systems Division into a new office located at 15737 Crabbs Branch Way, Rockville, MD, will now be moving out, back to 11810 Parklawn Drive where Jay Magenheim, president and founder of IDEAL, will run the Planroom and software side of IDEAL's business.

In comes Contex Americas Inc!
Phil Magenheim, Jay's brother, stays in the Crabbs Branch Way office as the new president and COO (chief operations officer) of the new Contex Americas Inc. His brief is to expand sales in both North and South America. The Contex Scanning Technology Inc office in Chantilly, VA, will close sometime soon.

  • Contex Americas Inc.
  • 15737 Crabbs Branch Way
  • Derwood, MD 20855 , USA
  • TEL: +1 (240) 299-5600
  • FAX: +1 (240) 468-1119
  • WEB: www.ideal.com
  • EMAIL: sales@ideal.com

What Contex say!

Contex expect the acquisition to expand their market leadership and increase their distribution base in North and South America. They say it continues their growth strategy and furthers their commitment to connect more closely with customers and distributors.

Contex say they bought IDEAL because IDEAL were focussed exclusively on the key North American market. By consolidating their North American operation with that of IDEAL's, Contex expect to have a bigger impact in the market and a closer working relationship with customers and partners. As a united business entity, Contex say they expect to offer a better service to distributors in North and South America.

Niels Appel, executive VP of Sales and Marketing for Contex A/S, says "I am happy about the merger of Contex Scanning Technology Inc and IDEAL which will strengthen our position on the North and South American market, as well as offer our partners an opportunity to grow further.

"IDEAL has been a valued Contex partner for many years, with more than 4000 mutual customers and a sales force that already works closely with ours. This transaction advances our ability to deliver top service, top value and top know-how to our end-customers and distribution partners in the Americas wide-format scanning market".

Phil Magenheim, president and COO of Contex Americas and co-founder of IDEAL Scanners and Systems, says "We are very excited to expand our presence in the large-format marketplace with Contex. We’re confident that the combined strengths, service expertise and talent of our two companies will deliver a positive experience for distributors, dealers and end-customers alike".

What IDEAL say!

We asked Jay Magemheim, president of IDEAL, "if this mean that you will now have more time to go fishing or do whatever it is you do in your spare time?" Magenheim replied. "First of all I do not fish but I do love to play golf, I hope to bring my handicap down a bit."

So what will he be doing? "I will be devoting my time to developing our Planroom software and adapting it to our scanning services which we will continue to provide. Ideal is also working with HP, adding the HP Instant Print software to Ideal Planroom. I am also seeking new and exciting technology to distribute and partnerships for Planroom and Scanroom".

"This acquisition has been timed to coincide with growth in our other products. Demand for online plan rooms and other online document management services is increasing, as is demand for 3D printing services and scanning services. We are expanding our software development efforts, re-vamping and re-vitalizing our scanning and 3D printing services."

Consolidation of IDEAL's Scanner Division with Contex enables IDEAL to focus on growth and customer services. IDEAL will continue its large-format focus. It will explore other markets and solutions that are in keeping with its core corporate values and mission.

Some speculative background

IDEAL blazed the trail for Contex scanners across the USA. This buyout concludes the history of IDEAL as Contex's most loyal, most proactive, most successful and longest-serving large format scanner distribution channel worldwide. It will be a hard act for Contex Americas Inc to follow.

IDEAL was named Distributor of the Year in 1993 and 1994 and then again for 12 consecutive years from 1997 to 2008. IDEAL brought commitment, dedication and software to the Contex product line, They did not dilute it by acquiring scanners from other manufacturers, an easy thing for IDEAL to have done on favorable terms given the success they enjoyed as the USA's premier large format scanner distributor.

Despite IDEAL's dedication to the Contex brand under the leadership of Jay Magenheim and the sales which he delivered, Contex made life difficult for him by appointing other US distributors, like Promark and Tekgraf, and allowing them to compete against IDEAL. It is now the turn of these companies and OEMs like GTCO Calcomp and even Vidar, to become anxious about Contex's intentions and future marketing plans.

It is suggested that IDEAL was up for sale. An industry source claims that six or seven years ago Magenheim attempted to sell IDEAL but there were no takers. The same source now suggests that Contex bought IDEAL because they were afraid it was up for sale again. Contex purchased IDEAL defensively with the aim of securing and protecting their most successful distribution channel from the risk of it being sold to a potentially unreliable buyer who did not understand Contex scanners and or the market.

Scanners4CAD think it far more likely that Contex are doing this to become more profitable as the world economy falters. Some industry commentators disagree but others believe that this theory has merit. European manufacturing is expensive, current margins are thin and the US dollar weak. As a long-standing and leading distributor IDEAL got a preferential deal from Contex paid for in now hugely diminished US dollars. It is not difficult to see why buying IDEAL made sense to Contex, despite their PR spin.

Contex have simply bought IDEAL's profit. With IDEAL out of the way Contex cut themselves a bigger, more profitable slice of the pie. This allows Contex to either bank more or to pass on some of the margin that would have gone to IDEAL to their distributors, resellers and customers. They may need to do this in the face of ever lower prices from Colortrac and Graphtec, now their main competitors in the standalone large format scanner market. It also gives Contex other options, like selling direct.

It is said that HP are a company which Contex much admire. HP badge OEM scanners from Contex. Both companies have substantial market share, the one in printers, the other in scanners. It is also said that Contex have always tried to model themselves on HP. Recently, to the alarm of their distribution channel, HP began to sell printers direct to customers from their web site. Some are wondering if Contex Americas Inc will now follow suit. It is the development which Contex distributors and resellers fear most.

IDEAL.com:
www.ideal.com

Contex Europe:
www.contex.com

Contex USA:
www.contex.com