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Pitney Bowes Announces Sale of its Software Solutions Business to Syncsort for $700 million
Sale unlocks value for shareholders while advancing the Company’s transformation efforts to focus on removing the complexities of shipping and mailing for clients
Majority of the net proceeds to be used to pay down near-term debt maturities
Company updates 2019 annual guidance
“Our software and data business has made great progress over the last few years achieving two consecutive years of growth and I am very confident of the prospects for this business going forward,” said
Lautenbach continued: “While it is never easy to make these kind of decisions, I am convinced that this is the right thing to do for the long term.
Following the conclusion of the Company’s evaluation of strategic alternatives in 2018, Pitney Bowes’ senior management, along with the Pitney Bowes Board of Directors, committed to consider other options to unlock value for shareholders. Since then, the Company has divested its Document Messaging Technologies (DMT) Production Mail and supporting software business; sold its direct operations within the Global SMB business in six smaller European countries; paid down debt; altered the return of cash to shareholders from a dividend to a share buyback; launched
Use of Net Proceeds
The Company plans to use the majority of the net proceeds from the sale to pay down near-term debt maturities.
“We have several tranches of debt that are maturing over the next two years and we will use the majority of the net proceeds from this transaction to pay down that debt and we will refinance the remainder,” said
2019 Guidance
Beginning with the third quarter, Pitney Bowes Software Solutions will be recorded as discontinued operations and prior periods will be recast to exclude Software Solution’s results from continuing operations. The recast financial statements will be posted to the Company’s Investor Relations website by the end of September.
For 2019, the Company is updating its annual revenue growth rate, adjusted EPS and free cash flow guidance as follows:
- Revenue to be in the range of 1 to 2 percent growth on a constant currency basis when compared to the recast 2018 revenue
-
Adjusted EPS to be in the range of
$0.65 to $0.75 -
Free cash flow to be in the range of
$175 to $205 million
This updated annual adjusted EPS guidance reflects the impact of the sale of Software Solutions as well as the impact from the higher level of tariffs, which were not assumed in the Company’s original guidance. These impacts are expected to be partially offset by a deferred tax asset valuation allowance reversal, which based on current results and future income projections is currently expected to be recorded in the third quarter, and as a result the Company expects third quarter attainment to the full year for adjusted EPS to be in the range of 32 to 34 percent.
Guidance reflects the shift of the business to the fourth quarter as shipping continues to be a larger part of the portfolio. As a result, the Company expects its fourth quarter attainment to the full year for revenue to be in the range of 26 to 28 percent.
As a result of this transaction, the Company will further streamline its operations and reduce spend. The dilution from the divestiture is expected to be earnings neutral in the 12 months following the closing of this transaction as a result of the lower interest expense related to the pay down of debt and overall spend reductions.
Prior to the close,
About Syncsort
Syncsort is the global leader in Big Iron to Big Data software. We organize data everywhere to keep the world working – the same data that powers machine learning, AI and predictive analytics. We use our decades of experience so that more than 7,000 customers, including 84 of the Fortune 100, can quickly extract value from their critical data anytime, anywhere. Our products provide a simple way to optimize, assure, integrate, and advance data, helping to solve for the present and prepare for the future. Learn more at syncsort.com.
About
Forward Looking Statements
This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about its future revenue and earnings guidance and other statements about future events or conditions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to: declining physical mail volumes; changes in, or loss of, our contractual relationships with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20190826005187/en/
Source:
Media:
Bill Hughes
Chief Communications Officer
203-351-6785
Emily Simmons
Communications, Software Solutions
843-467-1071
Financial:
Adam David
VP, Investor Relations
203-351-7175