Diebold Sells Its Voting Machine Unit to Competitor

http://www.nytimes.com/2009/09/04/technology/04vote.html

Diebold Sells Its Voting Machine Unit to Competitor
September 3, 2009

Diebold has sold its much-criticized voting-machine business to its bigger competitor, Election Systems & Software of Omaha.

Diebold, based in North Canton, Ohio, announced the sale of its subsidiary Premier Election Solutions on Thursday and said it would receive $5 million plus payments representing 70 percent of collections of the unit’s accounts receivable as of Aug. 31.

Diebold expects to recognize a pretax loss on the deal of $45 million to $55 million.

Last year, Premier generated 2.8 percent of Diebold’s revenue. Diebold faced criticism of the reliability and security of its touch-screen voting machines and began looking for a buyer for Premier more than two years ago.

In 2007, Diebold, a maker of A.T.M.’s, distanced itself from the election unit, renaming it Premier, allowing it to operate more independently and giving it a separate board.

Its touch-screen voting machines used in elections across the country often drew criticism that the technology could be manipulated. The company has insisted touch-screen voting was reliable and an improvement over punch-card ballots that resulted in the disputed recount in Florida during the 2000 presidential election.

The sale reflects Diebold’s decision three years ago to focus on key markets, including A.T.M.’s and security systems, said Mike Jacobsen, a Diebold spokesman. The company is determined to move forward and not reflect on past election system problems, he said.

Premier has about 180 employees in the United States and Canada. Premier operates in 33 states and Election Systems & Software operates election services in 39 states and overseas.

S. Candice Hoke, an election law professor at Cleveland State University, said the sale raises questions about the consolidation of election services. “It’s a massive consolidation of voting-system vendors,” she said.

A version of this article appeared in print on September 4, 2009, on page B2 of the New York edition.