FedEx has agreed to buy copy-shop chain Kinko's for $2.4 billion. The move is seen as way to compete with rival UPS for the small office/home office customer, because UPS bought Mail Boxes Etc. in 2001.

The cash purchase of the 1,200 store network is expected to be completed this quarter, company officials said.

"Kinko's 1,200 locations will provide a lot of access for people who want to pack and ship. It's particularly important to FedEx Ground," said Frederick Smith, FedEx chairman and president.

He noted that Kinko's has more than 110 stores overseas, and the company hoped to expand their international business using the stores as leverage.

Kinko's has annual revenues of $2 billion. Smith said he was particularly impressed with Kinko’s recent forays in services such as computer access, meeting rooms and digital transmission of documents.

Kinko’s will maintain its Dallas headquarters but no decision has been made if it will keep its name when it becomes FedEx’s fourth operating company.