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Business appliance maker Danka Business Systems PLC announced the sale of its subsidiaries operating in Central and South America to Toshiba America Business Solutions (TABS), Inc., for U.S. $10 million in cash. The transaction encompasses Danka's operations in Puerto Rico, Mexico, Panama, Brazil, Venezuela, and Chile.
"The sale of these businesses builds on earlier dispositions and culminates our efforts to narrow the scope of the Americas Group to our largest and, historically, most profitable entity, the U.S.," said Danka CEO Todd Mavis. "This development will simplify our management and compliance requirements, enabling us to further streamline operations and focus our time and resources on the significant opportunities related to our high-value Managed Print Services (MPS) strategy. We plan to continue exploring additional ways around the world to concentrate our efforts on MPS in high-opportunity areas."
The six subsidiaries sold to Toshiba include imaging systems (including copiers and multi-functional peripheral devices) as well as related services and supplies. Combined, the subsidiaries employ about 500 people and contributed revenue of $30.4 million and operating profit of $1.6 million in Danka's fiscal year ended on March 31, 2005. The Central and South American Units' net assets were $21.6 million as of March 31, 2005. Net proceeds from the sale will be used for working capital and reinvestment purposes.
"This transaction gives us a stronger direct presence in Latin America, which we believe provides tremendous market opportunities," said TABS incoming President and CEO Rick Taylor. "We are pleased to have concluded this transaction with Danka, which remains one of our premier business partners."
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