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Diebold gears up for electronic voting
By G. PATRICK KELLEY Repository business
writer
GREEN — Diebold could become the top
player in the electronic voting industry.
The company announced its intent Thursday
to acquire McKinney, Texas-based Global Election Systems,
and plans to hit the ground running for next year’s election with the acquisition of the voting terminal manufacturer. Jeff Matthews, director of the Stark
County Board of Elections, was attending an election
officials
conference in Columbus. Diebold’s announcement dominated the conference and trade show, where Global was on exhibit. “It’s a bold step. They purchased one of
the largest players in the industry,” Matthews said.
“The other vendors are putting on a good
front,” he said. “But they’re pretty small. Diebold is positioned
to dominate the market.” He called Diebold a “world-class
organization ... far beyond those currently in the industry.”
The agreement in principle includes a
stock-for-stock transaction, plus Diebold will provide $5 million
in
financing to Global. It’s not Diebold’s first foray into the
election market. Last year, its Brazilian subsidiary, Procomp,
supplied Brazil, the world’s largest nationwide voting system, with more than 180,000 voting terminals, accessories, software, installation, training, logistics and support. After the ballot-counting disaster in
Florida, which held up last November’s presidential election,
the
company could see opportunity in the United States market. “We’ve been talking about this since the
end of last year,” said spokesman Mike Jacobsen.
The technology used in the Brazilian
terminals was not adaptable to the U.S., so Diebold looked at a
a
number of companies. Global has “strong technology,” and, for
U.S. elections, “they have proven solutions, and their solutions
are all certified,” he said. “So we’re all ready to go for the 2002
election as soon as this is approved.”
Global terminals already are in more than
850 jurisdictions in North America with AccuVote (optical
scan) or AccuVote-TS (touch screen) voting systems. Global’s certification and experience were
key in Diebold’s decision, Jacobsen said.
“Without the certification, we wouldn’t be
ready for the 2002 election,” he said.
“Speed to market was very important to
us.”
Diebold and Global also signed a
manufacturing contract where Diebold will produce more than 500
touch screen voting terminals to fulfill a Global contract. Global’s production capability is very
small right now, Jacobsen said. Diebold is the largest company in
the industry. Voting machines will be made at Diebold
plants, but “which ones are yet to be determined,” Jacobsen
said. The company could use existing plants or acquire new ones, he said. Diebold employs about 1,200 in the Stark
County area. Less than 125 of those are production jobs.
“Global is an industry leader with
excellent voting solutions, and provides Diebold with
considerable
expertise and knowledge of the U.S. election solutions market,” said Walden W. O’Dell, Diebold chairman, president and chief executive officer in a prepared statement. “With Diebold’s solid financial position,
manufacturing capability and a nationwide service and
support
organization, we will become a formidable solutions provider for the elections industry,” he said. “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.” Diebold expects the acquisition to be
neutral on 2001 earnings and positive in 2002. The acquisition
is
expected to be completed by the end of September. “I think you’re going to see some more
mergers or acquisitions occur because of this,” Matthews said.
“It’s an exciting development. It’s good
for the election industry, it’s good for Stark County and it’s good
for the world.”
This page was created June 22, 2001
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