Hannover for Kofax hardware arm

Imaging and process automation vendor focuses on software; 20 EMEA lay-offs expected

Kofax has entered into a definitive agreement to sell its hardware business to Hannover Finanz, a private equity firm headquartered in Germany, and to members of the business unit’s management team, for $20m (£12.5m) after tax.

Twenty redundancies in EMEA are expected, alongside cost savings of $2.5m in the fiscal 2012 year.

Reynolds Bish, chief executive officer of Kofax, said: "The proceeds from this transaction and the planned restructuring will better position us to focus on and further grow our software business revenues and earnings both organically and via our acquisition strategy."

Bish added that Kofax had done better in the second half – ending in December 2010 – than it forecast, and that it expected its key partner relationships to continue.

"The business will continue to be an important VAD of Kofax VRS and Kofax Express software products in EMEA," Bish said.

The deal is expected to close in March, and include a one-off charge of up to $2.6m to cover the restructuring.

The hardware business under Hannover Finanz will trade as Dicom International and be headed by Joachim Froning, the current senior vice president of hardware distribution sales at Kofax.

"It will allow us to better focus our efforts on growing the business and improving its operations, especially with Hannover Finanz – a well established and respected investment firm – as our primary shareholder and financial partner," Froning said.

"We have chosen to use the Dicom brand and corporate name to build upon the legacy strength of this business, and want to assure all of our valued resellers and suppliers that it will be 'business as usual' between now and the closing of this transaction in March and thereafter."