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Diebold sells Premiere Election Solutions to competitor ES&S

Posted By Stephen C. Webster

On September 3, 2009 @ 7:30 pm

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 it’s 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 [1] Election Systems & Software for just $5 million. Diebold purchased the company for $31 million in 2001, noted [2] 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,” [3] added The Cleveland Plain Dealer.

“Diebold was the industry’s biggest maker of electronic voting machines heading into the 2004 elections,” [4] 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 Premiere’s accounts payable, [5] added Reuters.

The sale concludes Diebold’s involvement in North American elections, either in the U.S. or Canada. It does not, however, affect its operations in Brazil, where its ATM’s are [6] growing in popularity with the nation’s largest bank.

The company also supplies “voting machines for Brazil’s national elections board, the Tribunal Superior Eleitoral,” [7] notes ATM Marketplace. “Diebold entered the elections business in Brazil in 1999.

Brazil is South America’s largest economy, and its president [8] said Thursday that he expects his nation to become one of the world’s powers in the 21st Century.

“Premier has about 180 employees in the United States and Canada,” [9] 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 company’s image,” added the Canton Rep. “Key among its problems was a 2003 statement by then Chairman and CEO Walden O’Dell — 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 company’s core business, led to O’Dell’s ouster in December 2005.”

“Diebold said Premier generated $88.2 million, or 2.8%, of its total revenue in 2008,” [10] reported CNN.

URLs in this post:

[1] Election Systems & Software: http://www.essvote.com/HTML/home.html

[2] Ohio newspaper The Canton Rep: http://www.cantonrep.com/business/x2025177795/Diebold-sells-Premier-Election-Solutions-for-5-million

[3] added The Cleveland Plain Dealer: http://www.cleveland.com/business/index.ssf/2009/09/diebold_inc_sells_off_its_elec.html

[4] noted The Wall Street Journal: http://online.wsj.com/article/SB125199401359883707.html

[5] added Reuters: http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSBNG54713720090903

[6] growing in popularity: http://www.news.diebold.com/article_display.cfm?article_id=4903

[7] notes ATM Marketplace: http://atmmarketplace.com/article.php?id=11284&na=1

[8] said Thursday: http://www.google.com/hostednews/afp/article/ALeqM5i4W9w_9uT8xyABt3UeZYiptc0maQ

[9] reported the Associated Press: http://www.google.com/hostednews/ap/article/ALeqM5iiesbo_XRYKaqI5BTjx1nFgJGUzQD9AG1N900

[10] reported CNN: http://money.cnn.com/2009/09/03/news/companies/Diebold_voting_machine/index.htm