On April 30, 2018, Pitney Bowes announced that it signed a definitive agreement for the sale of its Document Management Technologies (DMT) production mail business to Platinum Equity for $361. Included in the transaction is the enterprise mail, print and data management software that integrates data with print streams to optimize document output for high-volume production mailers.
“In November 2017, we initiated a review of strategic alternatives to create long-term shareholder value,” said Marc Lautenbach, Chief Executive Officer, Pitney Bowes. “Our decision to sell our Document Messaging Technology business is the result of a thorough evaluation of the best opportunity for long-term growth for both DMT and Pitney Bowes. As a stand-alone business, DMT will have greater flexibility and opportunity to build on its industry-leading portfolio, create greater market opportunity and deliver new client value. For Pitney Bowes, this transaction supports our move to higher growth markets and aligns with our strategic intent to do in the shipping market what we’ve done in mailing for almost 100 years – enabling global commerce by taking out the complexity and enhancing the value for clients.”
During a conference call on May 2 following the release of Pitney Bowes’ first quarter financial results, he offered additional insights into the sale:
“Earlier this week, we announced the sale of Production Mail and its supporting software to Platinum Equity. The Production Mail business is a leader in this industry. Our strategic review validates that this business is more viable outside our company. I’ve said many times in the past that we will do what is right by our shareholders to create long-term value for our company. This is a prime example. This business performs well and is a market leader but does not have a strong tie to our shipping and addressing focus as our other businesses. We have and will continue to look at a broad range of alternatives as it relates to the portfolio and the resulting capital allocation decisions that go along with it …”
“But the sale of Production Mail isn’t something that we just thought about over the last 6 months. Candidly it’s been something that we’ve been thinking about for several years. And it had to do with the end user growth of the overall market and how that market is evolving. So that’s a market that’s, as we describe it, flattish with margins that are acceptable but under pressure as the buyers of that technology begins to consolidate.
“That being said, we like that business. We think that business has got great opportunities. But it’s not ever going to get capital inside of our business given the end user dynamics of the particular marketplace. So I would say as we went through the conversation with the board about strategic alternatives, this is when that we decided the timing was right both internally and externally. We think we’ve got a really good and fair price for the asset. I think this is a great company and we’ll do really well going forward. I just think it’s going to do better outside of the portfolio than in.”