ACCO Brands Corporation, a world leader in office products, announced today that it has sold its GBC – Fordigraph Pty Ltd subsidiary, based in Sydney, Australia, to The Neopost Group, based in Paris, France. GBC – Fordigraph has been the exclusive distributor of Neopost products in Australia for almost twenty years.
Neopost intends to retain the existing management staff and employees of GBC – Fordigraph and will be the exclusive direct sales channel distributor for select GBC print finishing products in Australia. GBC – Fordigraph employs approximately 175 people.
The sale of GBC – Fordigraph will have no impact on ACCO Australia or the company's Pelikan Artline joint-venture, which are ACCO Brands’ two larger businesses servicing resale channels in Australia.
GBC – Fordigraph had revenues of approximately US$46 million, operating income from continuing operations of approximately US$5 million and earnings of approximately US$4 million (or $0.07 per share), for the year ended December 31, 2010 The company will account for GBC – Fordigraph as a discontinued operation. The reclassification to discontinued operations will reduce ACCO Brands’ previously reported full-year 2010 revenue, operating income from continuing operations and earnings accordingly. The reclassification to discontinued operations will reduce ACCO Brands’ previously reported second quarter 2010 revenue, operating income from continuing operations, and earnings by approximately $11 million, $1 million and $1 million (or $0.02 per share), respectively.
The company intends to file a Form 8K by June 30, 2011, that restates company financial results through the first quarter of 2011 reflecting the reclassification of GBC – Fordigraph to discontinued operations.
Adjusting for the impact of the divested business, the company is reiterating its full year 2011 sales and earnings guidance for the continuing operations. The company expects sales from continuing operations to increase between 2-4%, before the effects of foreign currency, and diluted earnings per share from continuing operations, excluding the gain on disposal, to grow between 20% and 30%, on a normalized 30% tax rate basis.
Including gross proceeds from the sale, the company is increasing its 2011 free cash flow target (after interest, taxes and capital expenditures) to $100-110 million, up from $50-60 million.