Diebold Inc.buys IT firm

SSN Staff  - 
Sunday, August 1, 2004

TFE Technology adds expertise in network infrastructure, service
NORTH CANTON, Ohio - Systems integrator Diebold Inc. made significant inroads into the IT side of the market in late June with its acquisition of network solutions provider TFE Technology Holdings.

The purchase marks the first of its kind for Diebold and makes it one of only a few systems integrators to own an IT and networking company. While it is not uncommon for systems integrators to offer IT expertise in-house, the size of TFE Technology is perhaps unmatched by any other company.

TFE Technology provides Diebold with an extensive reach to offer network infrastructure. The Bountiful, Utah-based company employs 250 people and operates 30 offices across the country, Puerto Rico and Guam. In 2003 the company generated revenues of $34 million.

“If you start to look at the electronic security market, a big percentage of products are being connected via the network,” said Richard Baggot, vice president of Diebold’s Electronic Security and Currency Systems Group. “Our thought is to get a leg up on the marketplace, to get ahead of the curve.”

The two companies began talking about eight months ago, but those discussions originally centered around TFE Technology offering support services to Diebold.

“In part of those discussions it was decided that we had a fit and strategic growth opportunities,” said John Walker, president of TFE Technology. “So we moved from working together to merging together.”

TFE Technology was created as the result of a spinoff in September of 1999 and up until now was owned by a venture capital group. It was originally part of Telos Corp., an IT services company for the federal government. TFE Technology focused on delivering services, while Telos Corp. integrated IT systems.

Now that it is part of Diebold, the plan now for both Diebold and TFE Technology to cross-sell services. As a federal IT contractor, TFE Technology also offers Diebold direct access to the federal and state government market.

Much of the company’s work centers around IMAC services, according to Walker, which stands for installations, moves, adds and changes, such as LAN relocations. But with TFE Technology’s expertise combining with that of Diebold’s, Walker expects to offer clients a broader breadth of services.

It’s unclear how much additional business will be realized now that TFE Technology is part of Diebold, but company officials expect growth from each area of expertise.

“We’re going to try to maximize this as best we can,” said Baggot.