Tuesday, April 12, 2011

Closing of Sale of Kofax Distributor Delayed

It doesn't seem like a big deal, but apparently the closing of the sale of Kofax's hardware distribution business has been delayed for a couple months. According to this article, the deal, which was announced in January and originally expected to close in March, will now close next month. According to an analyst quoted in the article, "Kofax has confirmed that the delay is due to a combination slightly longer timescales to create the required legal entities and to complete the necessary regulatory filings in order to complete the spin off and transfer of the business to the new owners, Hannover Finanz. The delays have been particular issues in the United Arab Emirates, South Africa and certain other countries."

The sale of the $130 million, slightly profitable business, will net Kofax some $20 million that it is expected to use for acquisition. Interestingly, when I talked with Tony Barbeau of Kodak Document Imaging, we compared Kodak's sale of its microfilm business to Kofax's sale of the hardware distribution business. Both businesses were actually the foundations of the entities that are now selling them. In the early days, profits from each were used to fund new businesses that have now overtaken the legacy operations.

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