Latin American Disposals

26 Sep 2005 07:13

Danka Business Systems PLC26 September 2005 Danka Announces Sale of Central and South American Business Units - Transaction Completed with Toshiba for $10 million - ST. PETERSBURG, Fla., September 26, 2005 - Danka Business Systems PLC (NASDAQ:DANKY) today announced the sale of its subsidiaries operating in Central andSouth America to Toshiba America Business Solutions, Inc., ("TABS") for $10million in cash. The purchase price is subject to a $1 million holdback for aperiod of up to one year for potential contingencies. The transactionencompasses Danka's operations in Puerto Rico, Mexico, Panama, Brazil, Venezuela, and Chile. "The sale of these businesses builds on earlier dispositions and culminates ourefforts to narrow the scope of the Americas Group to our largest and,historically, most profitable entity, the United States," said Danka ChiefExecutive Officer Todd Mavis. "This development will simplify our management andcompliance requirements, enabling us to further streamline operations and focusour time and resources on the significant opportunities related to ourhigh-value Managed Print Services (MPS) strategy. We plan to continue exploringadditional ways around the world to concentrate our efforts on MPS inhigh-opportunity areas." The six subsidiaries sold to Toshiba provide, within their respectiveterritories, imaging systems (including copiers and multi-functional peripheraldevices) as well as related services and supplies. Combined, the subsidiariesemploy about 500 people and contributed revenue of $30.4 million and operatingprofit of $1.6 million in Danka's fiscal year ended on March 31, 2005. TheCentral and South American Units' cumulative balance sheets assets were $21.6million as of March 31, 2005. Danka expects to record an estimated non-cash losson the sale of approximately $31million in the quarter ended September 30, 2005in its US GAAP financial statements, approximately two-thirds of which isattributed to the write-off of non-cash foreign currency cumulative translationadjustments for the Central and South American business units. Net proceeds fromthe sale will be used for working capital and reinvestment purposes. "This transaction gives us a stronger direct presence in Latin America, which webelieve provides tremendous market opportunities," said TABS incoming Presidentand CEO Rick Taylor. "We are pleased to have concluded this transaction withDanka, which remains one of our premier business partners." As part of its comprehensive reengineering and restructuring initiative, Dankahas exited non-strategic or underperforming operations in several parts of theworld over the past few years, including Canada earlier in the prior quarter andPortugal and Russia during the fiscal year ended March 31, 2005. 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. -end- Contacts: Danka Investor Relations - Donald W. Thurman, 001-770-280-3990 Danka London - Paul G. Dumond, 44-(0)207-605-0150Weber Shandwick Square Mile James Chandler, Dominic Furlonge, Helen Thomas 44-(0)207-067-0700 Danka is a registered trademark of Danka Business Systems PLC. All othertrademarks are the property of their respective owners. This information is provided by RNS The company news service from the London Stock Exchange