Back to Main

Pitney's Unit Sale to Fund Bond Buyback - Analyst Blog

Posted: 10/3/2013 9:40:00 AM
Referenced Stocks: APO;BLKB;PBI;TRAK

Pitney Bowes Inc. ( PBI ) 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 ( APO ). 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 are Blackbaud Inc . ( BLKB ) and Dealertrack Technologies, Inc. ( TRAK ). Both the stocks carry a Zacks Rank #1 (Strong Buy).   

APOLLO GLOBAL-A (APO): Free Stock Analysis Report

BLACKBAUD INC (BLKB): Free Stock Analysis Report

PITNEY BOWES IN (PBI): Free Stock Analysis Report

DEALERTRACK HLD (TRAK): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research