2009-09-04 Diebold Dumps Most of Its E-Voting Business

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Diebold Inc. announced yesterday that it had sold its U.S. election systems business, primarily consisting of its Allen, Texas-based subsidiary, Premier Election Solutions, Inc., to Election Systems & Software, Inc.. The company's Brazilian voting systems subsidiary, Diebold Procomp Industria Eletronica Ltda, isn't affected.

Diebold further said in its announcement that it,

... has agreed to sell its elections systems business for $5 million in cash plus future cash payments representing 70% of any cash collected on the outstanding U.S. election systems business accounts receivable as of August 31, 2009. As a result of this transaction, Diebold expects to recognize a pre-tax loss in the range of $45 million to $55 million. The pre-tax loss includes the assets and liabilities of the business, certain retained legal liabilities, and other transaction costs. This business will be reported as a discontinued operation.

In January 2002, Diebold bought electronic voting machine maker Global Election Systems Inc. (GES) of McKinney, Texas, GES was acquired, according to a Diebold annual report, with a combination of cash and stock for a total purchase price of $24,667,000. A cash payment of $4,845,000 was made in January 2002 with the remaining purchase price being paid with company stock valued at $19,822,000. Goodwill and other intangibles acquired in the transaction amounted to $41,029.000.