Pitney Bowes Inc.
) recently issued a notice to repurchase its bonds due Aug 2014
valued at about $300 million. The company plans to fund the
repurchase from the proceeds generated by the divestiture of its
Management Services division to
Apollo Global Management, LLC
). Pitney Bowes's stock price rose 1.6% yesterday.
On Oct 1, Pitney Bowes completed the sale of its Management
Services division to funds affiliated with Apollo Global
Management. The division was sold at $400 million in cash. Pitney
Bowes had announced its intention to divest the business on Jul
30, 2013. In fiscal 2012, Management Services division generated
revenues of $921 million.
Pitney Bowes is a mailing equipment and software company,
providing technology solutions for small, mid-size and large
firms. Apollo is an alternative investment manager, having
exposure in private equity, credit and real estate funds.
This divestiture is a win-win situation for both the
companies. Through the sale of this division, Pitney Bowes
intends to become a more focused company and generate operating
efficiencies in the market, where the company has a core
competence. On the other hand, Apollo Global can benefit from the
division's technology-enabled document and communications
solutions that improve work processes, thereby enhancing customer
interactions and drive growth.
Post acquisition, Pitney Bowes Management Services will be
operating as a standalone company under the new name Novitex
Enterprise Solutions, allotted by Apollo.
Pitney Bowes currently has a Zacks Rank #3 (Hold). Other
stocks in the industry which are worth considering at the moment
). Both the stocks carry a Zacks Rank #1 (Strong Buy).
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