The point of sale terminal manufacturer Hypercom Corp. has sold the U.K. leasing business that sparked an accounting mess last year and led to the departure of two top executives.
The Phoenix company and its Hypercom EMEA Ltd. subsidiary sold the leasing business for about $12.25 million in cash on June 27 to Forrester UK Holdings LLC and an affiliate, Northern Leasing Systems Inc.
The sale includes about 30,000 terminal lease agreements with merchants.
William Keiper, Hypercom's chairman, president, and chief executive, said during a March quarterly earnings call that the U.K. leasing business was not a core part of the company "and in fact diverts energy and resources and management time."
The sale price was a bit below the $12.6 million that Hypercom's chief financial officer, Thomas Liguori, had estimated the unit was worth during that call.
The unit posted a loss of $3.5 million last year.
Problems with Hypercom's U.K. leasing business surfaced in February 2005, when the company said it was restating its results for the first three quarters of 2004. It had incorrectly defined about 3,200 leases during that period as sales leases instead of operating leases. The error led to an overstatement of its revenue for those periods by about $2.9 million and of its operating income by $2.2 million.
In quick succession, several shareholder lawsuits were filed, chief financial officer John W. Smolak resigned, and Christopher S. Alexander, who held the three posts now held by Mr. Keiper, retired.
Mr. Keiper, a director since April 2000, was named to those posts in April. Mr. Liguori was named chief financial officer in October; Grant Lyon had been interim CFO since March 2005.
A consolidated shareholder class action was dismissed in February.
