IKON's main business is selling and servicing printers manufactured by, well, anyone else but IKON. It also has a 20% of sales business managing corporate office centers - if your company has a mini post office, that nice lady there is actually an employee of ICON. Why would manufacturers need IKON to sell their products? For large corporate accounts they actually don't, but there are thousands of small businesses out there that Canon and HP don't want to be bothered with and that's where IKON steps in.
The main issue with IKON is that paper usage has been declining, pressuring service segment revenues (the less people print, the less things break down), while equipment sales have been flat because of combination of competition & declining sales of B&W printers. The company has started to aggressively push color recently and the analysts expect/suspect this initiative to show results in 2008/2009.
Company is currently trading at ~9X EBITA. I just don't see why this should trade any higher, given low-single digit long-term growth prospects and margins close to flat/improving by 50bps or so. Maybe some OEM would want to buy it, but given this would arouse lots of yelling among other OEMs whose products IKON sells, the buyer would need to be very suicidal. Overall I expect the stock to languish around the same level where it is right now for a long while.
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