Danka Announces Strategic Alliance With Hewlett-Packard.

ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Nov. 10, 1997--Danka Business Systems PLC (NASDAQ:DANKY) and Hewlett-Packard Company (NYSE:HWP) announced today a joint strategic alliance for the U.S. market. This new corporate-to-corporate agreement allows Danka to distribute and service the full line of HP LaserJet printers, scanners, other peripherals, as well as associated consumables, and is another step towards becoming a global multi-vendor service provider. This alliance is effective immediately and will be fully implemented in the first quarter of calendar 1998.

"One of our strengths in the market is our ability to implement document imaging and distribution systems that feature industry- leading products from major manufacturers," said Daniel M. Doyle, Danka's Chief Executive. "This alliance breaks new ground for both Danka and HP by bringing HP products to customers they haven't been able to reach before, and allowing us to integrate current and future HP devices into our solutions."

"HP's Digital Workplace strategy is about helping users migrate from large, centralized copy systems to a distributed, network printing solution," said Rich Raimondi, HP general manager, Hardcopy Services and Solutions Business Unit. "We formed a strategic alliance with Danka because of their commitment to digital imaging products, their consultative sales approach, and their ability to bring our mopier, printer and scanner products to a whole new set of customers for HP."

The alliance with HP broadens Danka's portfolio of products in the fastest growing segments of the digital copier and printer market. Dataquest predicts digital copiers and printers in segments 2, 3, and 4 (21-69 copies per minute) will grow from less than 5 percent of the current U.S. market to more than 32 percent by the year 2001. Printer shipments in these similar segments are forecast to more than double over the same time period, according to Dataquest. "The growth in these segments will be from companies expanding their solutions to include distributed printing as well as copying," said Robert Fennell, director and principal analyst, Dataquest. "Although this poses a challenge for traditional copier vendors, companies such as Danka who are expanding their product offerings to include digital printing solutions will continue to provide their customers the solutions they need."

"We are excited about the inclusion of HP products and their ability to enhance Danka's role as a preferred provider of multi- vendor office solutions. Customers in the next century are going to demand breadth and depth that cannot be found under a single manufacturer's roof. I am also very excited that we will offer nationwide service for HP LaserJet printers, as these products are a key component in accomplishing our vision of becoming a global multi-vendor service provider. This should prove advantageous when dealing with Fortune 1000 customers," Doyle explained. "We can act as an advocate or advisor to our customers because our mission is to implement manufacturer-independent solutions," Doyle reported. "We will continue to evaluate products, technologies and processes that speed access to, and the distribution of information, which can ultimately benefit the customer's bottom line."

The HP LaserJet 5Si Mopier and the new HP LaserJet 4000, will be linked to the Kodak LionHeart network in Danka's booth at Xplor, the International Document Conference in Dallas this week. The HP LaserJet 5Si Mopier quickly produces multiple sets of originals for networked departments, with powerful software, simplifying workflow and speeding output of completed documents. This device prints single- or double-sided, electronically collates, and staples documents. The HP LaserJet 4000 series printer sets new speed and print quality standards for workgroup printing. The printer outputs 17 pages a minute and offers several resolution choices. Built-in administrative software facilitates both job setup and management.

The alliance with HP currently applies only to the U.S. market, however discussions are underway for expansion of the agreement to include all Danka locations worldwide. HP products for workgroups and departments will be marketed and serviced through Danka's direct sales organization.

Danka Business Systems PLC, headquartered in London, England and St. Petersburg, Florida, is one of the world's largest independent suppliers of office imaging equipment and related services, parts and supplies. Danka employees over 20,000 people and provides office products and services from over 700 offices in more than 30 countries around the world.

Hewlett-Packard Company, of Palo Alto, Calif., is a leading global provider of computing, Internet and intranet solutions, services, communications products and measurement solutions, all of which are recognized for excellence in quality and support. HP has 120,500 employees and had revenues of $38.4 billion in its 1996 fiscal year. HP is the official information-technology hardware and maintenance supplier to the 1998 World Cup soccer tournament. Information about HP and its products can be found on the World Wide Web at http://www.hp.com .

Forward-Looking Statements 

Certain statements contained throughout this press release such as statements concerning: the Company's new agreement (the "Agreement") with Hewlett-Packard Company to distribute and service the full line of HP LaserJet printers, scanners, and other peripherals, as well as associated consumables; the integration of current and future HP devices into the Company's distribution systems; the expected growth in digital copiers and printers; the enhancement of the Company's competitive position; the benefits to be derived by the Company in servicing its Fortune 1000 customers as a result of providing service to HP LaserJet printers; the expansion of the Agreement worldwide; the marketing of HP products; and other statements contained herein regarding matters that are not historical facts are "forward looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995) and because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. Factors that might cause such differences include, among others, the following: (i) any material inability of the Company to successfully distribute and service HP products; (ii) any material inability of the Company to integrate HP products into its existing distribution system, and the effect such integration may have on the Company's existing product lines; (iii) the Company's actual success in gaining a competitive advantage as a result of the Agreement; (iv) any material failure by the Company to achieve its expected growth in digital copiers and printers does not materialize due to changes in technology, market conditions or otherwise; (v) continuation of the Agreement, the continued ability of HP to supply competitive products at competitive prices. Readers are cautioned not to place undue reliance on the forward looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to update the forward looking statements to reflect events or circumstances that arise after the date hereof. -0-

NOTE: Kodak and LionHeart are trademarks of Eastman Kodak Company. LaserJet is a trademark of Hewlett-Packard Company.

NOTE TO EDITORS: In the World Wide Web address noted in this news release, there is a double slash between http: and www.hp.com . These symbols may not appear properly in some systems.

CONTACT: Richard Quinn, 716/752-7708