DNK.L Regulatory News (DNK)

1 Jul 2005 07:01

Danka Business Systems PLC01 July 2005 For immediate release 1 July 2005 DANKA BUSINESS SYSTEMS PLC Danka announces sale of Canadian business unit - Transaction completed with Canadian subsidiary of Pitney Bowes Inc.- Danka Business Systems PLC (LSE: DNK; NASDAQ: DANKY), a leading independentglobal provider of office imaging systems and services, today announced that thecompany has entered into an agreement to sell the shares of its Canadianbusiness unit, Danka Canada Inc., to Pitney Bowes of Canada, Ltd., a subsidiaryof Pitney Bowes Inc., for a purchase price of U.S. $14 million in cash. Thepurchase price is subject to a 10% holdback for a period of up to one year forpotential contingencies related to the transaction. The proceeds of thetransaction will be used for working capital purposes. "We are very pleased to have reached this agreement with a company of PitneyBowes' stature and reputation," stated Todd Mavis, Danka's Chief ExecutiveOfficer. "This transaction is an example of the progress we are making on ourstrategy of exiting markets where we have not achieved sufficient scale. Whilewe have worked hard and made progress in certain areas of the Canadian business,we have not been able to reach profitability and we feel our efforts andresources are best directed to our core businesses. I believe the business unitis now well positioned for success, and when combined with Pitney Bowes'existing operation in Canada, presents the potential for synergies andprofitability, as well as great opportunities for our employees and customersthere." Danka Canada, headquartered in Toronto, provides imaging systems and services,including copiers and multi-functional peripheral devices and related servicesto customers in major Canadian markets. During the fiscal year ended on March31, 2005, the subsidiary's revenues were U.S. $35.9 million, balance sheet grossassets were U.S. $17.3 million, and it experienced a net loss of U.S. $7.7million which included U.S. $2.7 million in restructuring expense. - ends - For further information please contact: Danka Business Systems PLCDonald Thurman, Danka Investor Relations 001 770 280 3990Paul Dumond, Company Secretary 020 7605 0150 Weber Shandwick Square MileMike Kirk/Helen Thomas 020 7067 0700 About Danka Danka delivers value to clients worldwide by using its expert technical andprofessional services to implement effective document information solutions. Asone of the largest independent providers of enterprise imaging systems andservices, the company enables choice, convenience, and continuity. Danka'svision is to empower customers to benefit fully from the convergence of imageand document technologies in a connected environment. This approach willstrengthen the company's client relationships and expand its strategic value.For more information, visit Danka at www.danka.com. Certain statements contained in this press release, including statements relatedto Danka's future business and financial performance, are forward-looking. Suchstatements reflect the current views of Danka with respect to future events andare subject to certain risks, uncertainties, and assumptions that could causeactual results to differ materially from those reflected in the forward-lookingstatements. Readers are cautioned not to place undue reliance on these forwardlooking statements, which reflect management's analysis only as of the date theyare made. Danka is a registered trademark and Danka @ the Desktop and MyDanka.com aretrademarks of Danka Business Systems PLC. All other trademarks are the propertyof their respective owners. This information is provided by RNS The company news service from the London Stock Exchange