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December 16, 1997updated 01 Sep 2016 4:31pm

DIEBOLD BUYS BACK STAKE IN INTERBOLD SELF SERVICE FROM IBM

By CBR Staff Writer

Automated Teller Machine maker Diebold Inc is looking to gain back total control of its self-service systems business by buying out IBM Corp’s 30% interest in the companies’ InterBold joint venture. Diebold says IBM approached it in July wanting to sell its share in InterBold, apparently in line with its strategy to get out of non-core joint venture businesses. InterBold was set up in 1990 to give Canton, Ohio-based Diebold Inc access to an international distribution channel. Diebold says it has been building its own international distribution network for the past couple of years, and felt it was in a good position to buy IBM out of InterBold. After failing to agree on a price for the 30% of InterBold, the companies referred the matter to a third party, which set the price at a little less than $20m. Diebold says it considers this price to be fair and reasonable. Under the terms of the original agreement, IBM now has 30 days in which to exercise its right not to sell its shareholding, but Diebold believes it would be unlikely to pull out at this stage. The company says it is currently evaluating its distribution options on a country by country basis. IBM has to date had exclusive distribution rights for most countries outside the US, with a few exceptions. If the sale goes ahead, Diebold says it may well continue to use IBM, but is also evaluating the option of selling direct or using other distributors in certain countries. The Automated Teller Machine business accounts for 70% of InterBold’s business, and the agreement with IBM covered the banking industry specifically. Diebold says it is now looking to expand its business beyond banking, particularly into the University and healthcare industries. The other 30% of its business is in card- based security systems, and the company says it is also expanding this side of the business. It has already combined security and electronic payment card systems at some 350 US universities, and has recently extended these to one UK and one South African university. In the healthcare sector, it has recently introduced a card-based automated pharmacy system for hospitals and health care institutions, whereby the nurse swipes a card and enters a personal identification number to access the drug store, enters details of the patient, and the drugs to be dispensed, which are automatically debited from stock and the patient is billed automatically.

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