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Diebold gears up for electronic voting
 
 By G. PATRICK KELLEY Repository business writer
 
 GREEN — Diebold could become the top player in the electronic voting industry.
 
 The company announced its intent Thursday to acquire McKinney, Texas-based Global Election Systems,
 and plans to hit the ground running for next year’s election with the acquisition of the voting terminal
 manufacturer.
 
 Jeff Matthews, director of the Stark County Board of Elections, was attending an election officials
 conference in Columbus. Diebold’s announcement dominated the conference and trade show, where
 Global was on exhibit.
 
 “It’s a bold step. They purchased one of the largest players in the industry,” Matthews said.
 
 “The other vendors are putting on a good front,” he said. “But they’re pretty small. Diebold is positioned
 to dominate the market.”
 
 He called Diebold a “world-class organization ... far beyond those currently in the industry.”
 
 The agreement in principle includes a stock-for-stock transaction, plus Diebold will provide $5 million in
 financing to Global.
 
 It’s not Diebold’s first foray into the election market. Last year, its Brazilian subsidiary, Procomp,
 supplied Brazil, the world’s largest nationwide voting system, with more than 180,000 voting terminals,
 accessories, software, installation, training, logistics and support.
 
 After the ballot-counting disaster in Florida, which held up last November’s presidential election, the
 company could see opportunity in the United States market.
 
 “We’ve been talking about this since the end of last year,” said spokesman Mike Jacobsen.
 
 The technology used in the Brazilian terminals was not adaptable to the U.S., so Diebold looked at a a
 number of companies.
 
 Global has “strong technology,” and, for U.S. elections, “they have proven solutions, and their solutions
 are all certified,” he said.
 
 “So we’re all ready to go for the 2002 election as soon as this is approved.”
 
 Global terminals already are in more than 850 jurisdictions in North America with AccuVote (optical
 scan) or AccuVote-TS (touch screen) voting systems.
 
 Global’s certification and experience were key in Diebold’s decision, Jacobsen said.
 
 “Without the certification, we wouldn’t be ready for the 2002 election,” he said.
 
 “Speed to market was very important to us.”
 
 Diebold and Global also signed a manufacturing contract where Diebold will produce more than 500
 touch screen voting terminals to fulfill a Global contract.
 
 Global’s production capability is very small right now, Jacobsen said. Diebold is the largest company in
 the industry.
 
 Voting machines will be made at Diebold plants, but “which ones are yet to be determined,” Jacobsen
 said. The company could use existing plants or acquire new ones, he said.
 
 Diebold employs about 1,200 in the Stark County area. Less than 125 of those are production jobs.
 
 “Global is an industry leader with excellent voting solutions, and provides Diebold with considerable
 expertise and knowledge of the U.S. election solutions market,” said Walden W. O’Dell, Diebold
 chairman, president and chief executive officer in a prepared statement.
 
 “With Diebold’s solid financial position, manufacturing capability and a nationwide service and support
 organization, we will become a formidable solutions provider for the elections industry,” he said.
 
 “We expect the U.S. voting marketplace to generate $1.5 to $2 billion in hardware revenue during the
 next four to five years. This acquisition allows us to immediately capitalize on this expanding market, rather
 than undergo the lengthy certification and development process necessary to enter the market with our
 Brazilian product.”
 
 Diebold expects the acquisition to be neutral on 2001 earnings and positive in 2002. The acquisition is
 expected to be completed by the end of September.
 
 “I think you’re going to see some more mergers or acquisitions occur because of this,” Matthews said.
 
 “It’s an exciting development. It’s good for the election industry, it’s good for Stark County and it’s good
 for the world.”
 
 
 
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