Pitney Bowes has sold a controlling interest in most of its Global Ecommerce (GEC) segment operating in the United States to Hilco Global affiliate Hilco Commercial Industrial, which will wind down that business.
This move will eliminate nearly all the losses associated with GEC, which amounted to $136 million in 2023, Pitney Bowes said in a Thursday (Aug. 8) press release.
The sale follows the company’s May 22 announcement that it made a leadership transition — appointing Lance Rosenzweig as its interim CEO — and was working to become a more streamlined enterprise focused on its core, cash-generating segments.
“When the company announced our four strategic priorities in late May, we committed to working with speed and urgency to complete a comprehensive review of alternatives for GEC,” Rosenzweig said in the Thursday press release. “We are pleased to have delivered on that commitment by concluding a productive review and identifying an exit path for GEC that provides for an orderly and efficient wind-down of the business, which will ultimately maximize value for Pitney Bowes shareholders.”
By streamlining the company in this way, Pitney Bowes will be able to focus on its three core, cash-generating businesses: SendTech, Presort and Financial Services, Rosenzweig said in the release.
These segments will continue to conduct business as normal, with customers, partners and vendors not expected to see any impact from the change, according to the release.
Under Hilco’s ownership, two of the GEC entities entered Chapter 11 bankruptcy Thursday and, subject to approvals from the bankruptcy court, are expected to be wound down by early 2025, the release said.
Hilco has worked with many companies to wind-down operations in an efficient, responsible manner, while maximizing the value of their assets, per the release.
When announcing its leadership transition and company streamlining in May, Pitney Bowes said that in addition to reviewing the GEC business, it was undertaking cost rationalization, cash optimization and balance sheet deleveraging initiatives.
On Thursday, in a second-quarter earnings release, Rosenzweig said Pitney Bowes reduced its net loss from $142 million to $25 million.
“This improved performance reflects the organization’s commitment to being a more efficient and focused enterprise that leans into its core assets and strengths,” Rosenzweig said.
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