NORTH CANTON -- Diebold, Incorporated (NYSE: DBD) has signed a non-binding letter of intent to acquire Global Election Systems Inc. (Amex: GLE; Toronto: GSM). This transaction is subject to certain conditions, including the completion of due diligence, the negotiation and execution of definitive agreements and the approval of the merger by Global's stockholders.
The agreement in principle includes a stock-for-stock transaction valued at $1.50 per common share of Global Election Systems, subject to a maximum of .05 Diebold shares and a minimum of .04 Diebold shares per Global Election share. Global has approximately 21 million shares outstanding.
Diebold will also provide $5 million of immediate financing to Global. Diebold expects the acquisition to be neutral on 2001 earnings and accretive in 2002. The acquisition is expected to be completed during the calendar third quarter. Diebold is entitled to a breakup fee in certain circumstances if the acquisition is not completed.
Diebold and Global also signed a contract manufacturing agreement where Diebold will produce more than 500 AccuVote-TS touch screen voting terminals to fulfill a contract previously secured by Global.
"This action will complement our existing core competencies in self- service technology and security," said Walden W. O'Dell, Diebold chairman, president and chief executive officer. "Global is an industry leader with excellent voting solutions, and provides Diebold with considerable expertise and knowledge of the U.S. election solutions market."
O'Dell continued, "We expect the U.S. voting marketplace to generate $1.5 to $2 billion in hardware revenue during the next four to five years. This acquisition allows us to immediately capitalize on this expanding market, rather than undergo the lengthy certification and development process necessary to enter the market with our Brazilian product."
Last year Diebold's Brazilian subsidiary, Procomp, supplied the world's largest nationwide voting system, used by 109 million voters, during elections held throughout Brazil. Procomp provided the Brazilian government with more than 180,000 voting terminals, accessories, software, installation, training, logistics and support.
More than 850 jurisdictions in North America utilize Global Election Systems' AccuVote (optical scan) or AccuVote-TS (touch screen) voting systems. Its product line also includes VoteRemote, a high-speed automated absentee ballot printing and processing system.
