Diebold, maker of touch-screen voting systems that have brought controversy after controversy upon the company, said Thursday that it will sell off most of its elections-related business, calling it a losing investment and a persistent distraction.
The Ohio-based company said it told Texas-based Premiere Election Solutions to former rival vote machine manufacturer Election Systems & Software for just $5 million. Diebold purchased the company for $31 million in 2001, noted Ohio newspaper The Canton Rep. The company said its sale will force a pretax loss between $45 and $55 million.
For the last couple of years the elections business has been a distraction, a spokeswoman told the Rep.
Diebold retains certain existing liabilities, including an ongoing lawsuit involving the Cuyahoga County Board of Elections, and shares with ES&S other liabilities in connection with the elections systems business, added The Cleveland Plain Dealer.
Diebold was the industrys biggest maker of electronic voting machines heading into the 2004 elections, noted The Wall Street Journal. Security concerns have dogged electronic voting. The company in early 2006 decided to seek options for the U.S. elections business, including a potential sale. Diebold essentially separated the company from the rest of Diebold in August 2007, having no direct operational involvement in the business.
Included in the deal, Diebold said it would also collect 70 percent of Premieres accounts payable, added Reuters.
The sale concludes Diebolds involvement in North American elections, either in the U.S. or Canada. It does not, however, affect its operations in Brazil, where its ATMs are growing in popularity with the nations largest bank.
The company also supplies voting machines for Brazils national elections board, the Tribunal Superior Eleitoral, notes ATM Marketplace. Diebold entered the elections business in Brazil in 1999.
Brazil is South Americas largest economy, and its president said Thursday that he expects his nation to become one of the worlds powers in the 21st Century.
Premier has about 180 employees in the United States and Canada, reported the Associated Press. Premier operates in 33 states and ES&S operates election services in 39 states and overseas.
Perhaps the biggest loss was to the companys image, added the Canton Rep. Key among its problems was a 2003 statement by then Chairman and CEO Walden ODell a well-known Republican supporter and fundraiser that he was committed to delivering the vote for President George W. Bush.
The statement fueled organizations that already mistrusted electronic voting. It, along with a financial decline in the companys core business, led to ODells ouster in December 2005.
Diebold said Premier generated $88.2 million, or 2.8%, of its total revenue in 2008, reported CNN. (Raw Story, 9.04.2009, Stephen C. Webster)