ScanSource has announced it plans to sell its non-digital business across the UK, the rest of Europe, Latin and South America totalling $623 million.
The US distributor posted poor Q4 financials where revenues decreased three percent to $960.8 million and operating income shrank four percent to $29.4 million.
The outfit said it will flog operations worth $623 million in revenues in Europe, including the UK, Mexico, Colombia, Chile, Peru and Miami in the US. The move will affect around 490 employees in its Barcode and Communications business.
ScanSource CFO Gerry Lyons said: “In Europe, it’s both segments, so it’s both communications products and our point-of-sale barcode, primarily barcode products in Europe. And in Latin America it’s the same as well, so it’s both communications and barcode.”
CEO Mike Baur said that the move reflects ScanSource’s strategy to focus on its “higher-growth, higher-margin businesses. After considering our strategic options, we decided that the planned divestitures would offer opportunities to accelerate our profitable growth and cashflow. These actions will enable us to focus our investments on our higher-growth and higher-margin businesses in the US, Canada and Brazil, as well as our digital businesses globally. This will give investors increased insight into our long-term growth opportunities”.
Lyons revealed that the divestiture would allow ScanSource to pay off some of its debts, which amounted to $360 million as of 31 June 2019, as well as pour investment into its strong US and Brazilian markets.
