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Equifax to spin off payment unit
By STEVE HUETTEL © St. Petersburg Times, published October 3, 2000 Equifax, the nation's largest consumer-credit reporting service, said Monday it will spin off its fast-growing payment services business, which includes a St. Petersburg center where about 2,000 employees handle credit card accounts and authorize checks. The split won't mean any local job cuts, said Jenny Bavisotto, an Equifax spokeswoman in St. Petersburg. And the new public company, not yet named, will be run by executives well-familiar with the St. Petersburg operation. Lee Kennedy, who ran the office before becoming Equifax's president and chief operating officer last year, will be the president and chief executive. The current local boss, Larry Towe, will become executive vice president and chief operating officer. Both will work at the new company's headquarters in Atlanta, home of Equifax's corporate headquarters. Equifax is best known for producing credit reports from its huge consumer credit database. Its information services division, which includes consumer information and e-commerce businesses, brings in more than 60 percent of Equifax's $1.9-billion in annual revenue. But the payment services division, which manages about 30-million credit card accounts and processes more than 2-billion transactions annually, is the faster-growing side of Equifax. Payment services is the largest provider of credit card processing services to independent banks and credit unions. The business is expected to grow 13 percent to 15 percent next year, compared with 8 percent to 10 percent for information services, Equifax officials said. Each company will have its own management team, board of directors, sales force and database, said Tom Chapman, chairman and CEO of Equifax. "What we're doing is separating these units to multiply the growth of each," said Chapman, who will become chairman of the payment services business and remain Equifax's chairman and CEO. Equifax also wanted to make it easier for investors to understand the company. Some investors thought payment services would be worth more as a separate company. The spinoff will be a tax-free dividend, pending Internal Revenue Service approval, company officials said. They won't know how many shares of the new company Equifax stockholders will receive until the spinoff is nearly completed next summer, Bavisotto said. Equifax shares closed Monday at $26.69, down 25 cents. The St. Petersburg center is Equifax's largest payment services facility. Federal investigators recently checked into reports that employees at the Roosevelt Boulevard building, a former Honeywell plant, were suffering mysterious hair loss. But Occupational Safety and Health Administration officials found only five had total hair loss that could not be explained by other causes, a number consistent with such hair loss in the general population, said Lawrence Falck, chief of the Tampa OSHA office. - Information from the Associated Press was used in this report.
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From the Times Business report
From the AP
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