Back to top

Analyst Blog

Pitney Bowes Inc. (PBI - Analyst Report) 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 - Snapshot Report). 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 - Snapshot Report) and Dealertrack Technologies, Inc. (TRAK - Snapshot Report). Both the stocks carry a Zacks Rank #1 (Strong Buy).   

Please login to Zacks.com or register to post a comment.