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Diebold sells U.S. voting kiosk business, still owns Brazilian elections arm
After years of attempting to shed its controversial U.S. voting kiosk business, Diebold has announced the sale of Premier Election Solutions Inc. to a leading company in the space.
September 2, 2009 by Tracy Kitten — Editor, AMC
For years, North Canton, Ohio-based Diebold Inc. has been trying to shed its U.S. elections systems business, after controversy surrounding the voting kiosks' alleged malfunctions cropped up following the 2004 and 2008 U.S. presidential elections.
Today, Diebold announced it has finally sold the outfit, part of Allen, Texas-based Premier Election Solutions Inc., formerly known as Diebold Election Systems. The buyer, Omaha, Neb.-based Election Systems & Software Inc., is a leader in the election systems space.
Diebold sold the U.S. elections systems business for $5 million, plus 70 percent of outstanding accounts receivables as of Aug. 31. Diebold expects to recognize a pre-tax loss of between $45 million and $55 million as a result of the sale.
Diebold will maintain ownership of its Brazilian subsidiary, which manufactures voting machines for Brazil's national elections board, the Tribunal Superior Eleitoral. The company entered the elections business in Brazil in 1999.
Diebold spokesman Mike Jacobsen says the sale of the elections business will help Diebold focus on its core competencies in the United States — integrated services and financial self-service.
"In general, since Tom Swidarski came on as our CEO in early 2006, one of his priorities has been to focus our company's resources on the areas where we can best apply our expertise," Jacobsen said. "In August 2007, we said the elections business in the U.S. is not core to our expertise. Moving forward, we are continuing to focus our attention on a number of key business fundamentals. We'd been looking at a number of different potential buyers for the elections business, in the strategic space and the equity space since early 2006."
Diebold made its foray in the elections business in January 2002, when it acquired Global Election Systems Inc. In early 2006, there were allegations that the kiosks malfunctioned and controversy about former Diebold head Walden O'Dell's support of George W. Bush's 2004 campaign. O'Dell stepped down in December 2005.
Shortly after O'Dell's departure, in early 2006, Diebold said it planned to sell the U.S. elections systems business, since it was "non-core" to Diebold's overall operations.
In August 2007, Diebold realigned its U.S. elections subsidiary to operate as an independent entity and renamed the company Premier Election Solutions. Since that time, Diebold has maintained only a financial interest in Premier with no direct operational involvement.
In 2008, Premier generated $88.2 million in revenue, or 2.8 percent of Diebold's total reported revenue.
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