Atlanta (ots-PRNewswire) - Equifax Inc. (NYSE: EFX), a worldwide
leader in enabling and securing global commerce through its
information, direct marketing and payment processing businesses,
announced today that its Board of Directors has approved a plan to
separate the Company into two independent public companies:
Information Services, the world's leading provider of consumer and
commercial information and a leading provider of direct marketing
services worldwide; and Payment Services, a preeminent provider of
credit card processing and check risk management services around the
The Company intends to accomplish the separation through a spinoff
of Payment Services to its shareholders. The spinoff is expected to
take the form of a tax-free stock dividend.
Tom Chapman, chairman and chief executive officer of Equifax Inc.,
said, "Separating Information Services from Payment Services creates
two very strong companies -- each with its own management team and
Board of Directors focused on taking advantage of significant growth
opportunities in their respective markets. As independent companies,
each will set its own strategy for acquisitions, alliances, and
resource allocation; and make marketing and management decisions more
effectively. We believe that spinning off Payment Services will help
unlock the value of these successful, market-leading businesses and
provide the financial community with a more focused investment
Chapman continued, "Both Information Services and Payment Services
are highly profitable, yet separate businesses with very different
strategic objectives. The two businesses have their own sales forces,
different technologies and segregated databases. Their markets and
customers are distinct, and there are few meaningful synergies
between them. We strongly believe that splitting Information Services
and Payment Services into two separate public companies is the
optimal way to enable each business to realize its full potential and
create the greatest value for shareholders.
"Information Services and Payment Services each will be better
able to aggressively pursue its own growth opportunities as a
separate company. The ability of Information Services and Payment
Services to attract new customers and pursue new business
opportunities has at times been hampered by the fact that the largest
customers served by Information Services pose a significant
competitive threat to the customer base served by Payment Services'
largest unit, Equifax Card Solutions," Chapman added.
The Company noted that its earnings for 2000 are on track and it
expects to achieve EPS in the range of $1.67 to $1.71, consistent
with current analyst estimates. For 2001, Equifax expects total
revenue from both businesses in the aggregate to increase by 10 to 12
percent. For Information Services, the increase in revenue is
expected to be in the range of 8 to 10 percent and, for Payment
Services, revenue is expected to grow approximately 13 to 15 percent
The Company expects to record a one-time charge in connection with
the spinoff which will be taken in the quarter in which the spinoff
Equifax has not yet finalized the capital structures of the
post-spinoff Information Services and Payment Services companies.
However, by the time of the spin the Company expects to significantly
Equifax Information Services, in its 102nd year of operations, is
the leading provider of consumer and commercial information
worldwide, including the world's largest repository of consumer
credit information and a world-class consumer lifestyle and
demographic database. Information Services had revenues and EBITDA
(before general corporate expenses) of $1,121.9 million and $416.5
million, respectively, for the twelve months ending June 30, 2000.
Information Services is comprised of three units: Credit Services,
Consumer Information Services (CIS) and Equifax Internet Solutions.
Information Services provides value-added information that
facilitates transactions with consumers and businesses around the
-- Credit Services, operating in North America, Latin America and
Europe,provides information-based, value-added products and services
to assessrisk, market credit offers, and detect fraud. These products
and servicesare offered to customers representing a wide array of
industries,including: financial services, retail, automotive,
telecommunications andutility clients. Information Services provides
credit reporting, customerrelationship management, modeling and
analytics on over 400 millionconsumers and businesses to customers in
major markets throughout theworld, including the U.S., Canada, the
U.K., Spain, Portugal, Chile,Brazil, Argentina, Peru, and El
-- Consumer Information Services provides value-added consumer
directmarketing services to Equifax's traditional customers as well
as tocatalog, publishing, high tech, travel and manufacturing
clients. The CISproducts include direct marketing data and support,
and analyticalservices using demographic, lifestyle and specialty
data. CIS alsoprovides data capture, database management, and
registration card programsfor consumer durable goods manufacturers,
and conducts its own proprietarySurvey of America(TM). By combining
increasingly sophisticated, non-regulated consumer data with analytic
optimization software, CIS providescommercial customers with highly
targeted, customized solutions that notonly identify qualified buyers
but also likely buyers, significantlyreducing customer acquisition
costs and increasing the profitability ofCIS' customers.
-- Equifax Internet Solutions provides e-commerce solutions that
enableenterprises to authenticate identity, secure business
applications andboth issue and manage digital certificates.
Furthermore, through itsonline consumer direct initiatives, it offers
consumers the opportunity toview their credit profiles online and to
subscribe to credit monitoring services.
Chapman said, "In our 'information economy,' data and data
analytics are critical for customers to make good business decisions.
Information Services provides the crucial data and data analytics
that enable its customers to transact business successfully.
Information Services continues its strong momentum. Equifax is
expanding into new markets such as insurance and brokerage, and
continues to develop and implement new products that support our core
information product offerings as well as customers' emerging e-
commerce needs. In fact, we have more new products in our pipeline
today than at any time in our history."
Chapman continued, "While the value of consumer and commercial
credit information has been long recognized in the U.S., its benefit
is becoming increasingly evident to companies in Latin America and
Europe, where our business continues to grow, and in the Asia Pacific
region, where we see strong opportunities to expand our franchise. As
the trusted steward of the world's largest repository of consumer
credit information and as an internationally recognized brand name,
Equifax Information Services is in a unique position to capitalize on
these international growth opportunities.
"We believe that CIS will be an important contributor to our
long-term revenue growth. CIS' comprehensive consumer lifestyle and
demographic databases complement Information Services'
industry-leading credit information, analytic, decisioning and
e-commerce services. This creates a powerful consumer marketing
platform," Chapman said.
"Through Equifax Internet Solutions, we offer an array of
Internet-based products and services designed to deliver information
or facilitate a transaction on demand," Chapman added. "We expect to
achieve success in this business by leveraging our proprietary
databases and the core competencies developed in our information
businesses to enable and secure transactions over the Internet.
Today, we provide e-commerce solutions to customers including e-Bay,
Checkfree, Microsoft and Paymentech. In addition, we offer a suite of
direct-to-consumer products. We are also using the Internet to
broaden our distribution for all our information products."
Payment Services, the premier provider of payment solutions in the
U.S. and abroad, had revenues and EBITDA (before general corporate
expenses) of $736.0 million and $181.7 million, respectively, for the
twelve months ending June 30, 2000. Payment Services, which manages
approximately 30 million card accounts worldwide and processes over 2
billion payment transactions annually, includes two units: Card
Solutions and Check Solutions.
-- Card Solutions is the number one provider of comprehensive
cardholder processing solutions to community banks and credit unions.
Services include credit and debit card transaction processing, card
processing software, portfolio management and analysis, cardholder
customer service, card enhancements, credit marketing, risk
management, merchant processing, and collections to independent banks
and credit unions in the U.S. and major card issuers abroad.
-- Check Solutions is the leading provider of check risk
management services, which include check guarantee and authorization,
and related services such as data file exchanges, risk management
consulting, check collections, and database marketing in the U.S.,
the U.K., Canada, France, Ireland, Australia, and New Zealand.
Lee Kennedy, president and chief operating officer of Equifax
Inc., said, "We expect to see continued growth in Payment Services
both domestically and in its international markets. Card Solutions is
in a unique position in its market -- we are the number one provider
of card processing services to approximately 5,500 independent banks
and credit unions, a market that continues to see growth. Our premier
position in this market is strengthened by long-term contracts with
both the Independent Community Bankers Association and Card Services
for Credit Unions. Card Solutions continues to experience solid
growth reflecting our expanding presence within the community bank
and credit union markets.
"We continue to see increases in the number of customers, the
number of cards and transactions processed. Our Check Solutions
business is also realizing strong growth. Customers recognize the
superior performance of our risk management systems. Innovative
products, such as PayCheck Accept(SM), have facilitated our entry
into new markets such as payroll check acceptance," Kennedy added.
"While our domestic business continues to be strong, we believe
that the greatest growth will come from our international operations
where we have recently achieved several milestones, including our
recent contract with National Australia Bank. We are well positioned
to capitalize on rapid international card growth and the accelerating
trend toward outsourcing," Kennedy concluded.
The Company noted that Payment Services is now processing 73
percent more cards abroad than a year ago due to its extraordinary
growth in Brazil and the U.K. The Company's strong presence in Brazil
and Chile is a beachhead for further expansion into other Latin
American countries. In Asia-Pacific Payment Services recently won a
five-year card processing contract with National Australia Bank to
process 4.5 million cards in four countries. This opportunity
represents a critical step forward in the Company's expansion in that
region, and it expects the relationship to generate over $100 million
in revenue over the next five years. The scalability, portability and
flexibility of Payment Services' proprietary software systems have
created a significant competitive advantage contributing to the
Company's international success. These systems operate in 26
countries supporting over 100 million accounts.
Tom Chapman will remain chairman and chief executive officer of
Equifax and will become chairman of the new Payment Services company.
Lee Kennedy, currently president and chief operating officer of
Equifax, will become president and chief executive officer of the new
Payment Services company.
Phil Mazzilli, currently executive vice president and chief
financial officer of Equifax, will become president and chief
operating officer of Equifax. Larry Towe, currently executive vice
president and group executive of Payment Services, will become
executive vice president and chief operating officer of the new
Payment Services company.
The new Payment Services Company, which has yet to be named, will
have its own Board of Directors. The headquarters staffs of both
companies will be located in Atlanta. The Company does not
anticipate, at this time, any reduction in jobs nor any facilities
closures due to separating the two businesses.
The spinoff is subject to a favorable Internal Revenue Service
ruling regarding the tax-free distribution of shares and final
approval of the transaction by the Board of Directors of Equifax. The
Company expects to complete the spinoff by the summer of 2001.
Equifax expects to continue its $0.37 annual dividend until the
spinoff. The respective Boards of Directors will decide on their
Company's post-spinoff dividend policy.
Bear, Stearns & Co. Inc. is acting as financial advisor, and
Kilpatrick Stockton LLP is legal counsel to Equifax.
Equifax Inc., a worldwide leader in enabling and securing global
commerce, brings buyers and sellers together through its information
management, transaction processing, direct marketing, and customer
relationship management businesses. Atlanta-based Equifax (NYSE: EFX)
serves the financial services, retail, credit card,
telecommunications/utilities, transportation, information technology
and healthcare industries and government. Equifax adds knowledge,
expertise, convenience and security to provide value-added solutions
and processes for its customers wherever they do business, including
the Internet and other networks. Equifax employs about 15,000
associates in 16 countries with sales in almost 50 and has $1.9
billion in revenue.
Statements in this press release that relate to Equifax's future
plans, objectives, expectations, performance, events and the like are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and the Securities Exchange
Act of 1934. Future events, risks and uncertainties, individually or
in the aggregate, could cause actual results to differ materially
from those expressed or implied in these statements. Those factors
could include changes in worldwide and U.S. economic conditions that
materially impact consumer spending and consumer debt, changes in
demand for the Company's products and services, risks associated with
the integration of acquisitions and other investments, the spinoff of
Payment Services on a timely basis without adverse impact on the
Company's operations, and other factors discussed in the
"forward-looking information" section in the management's discussion
and analysis included in the annual report on Form 10-K for the year
ended December 31, 1999 and 10-Q for the period ending June 30, 2000.
There will be a teleconference to discuss the spinoff of Equifax's
Payment Services division on Monday, October 2, 2000 at 9:45am (EDT).
The live audio webcast of the speakers' presentations will be
available at: http://www.equifax.com. There will be a replay
available at http://www.equifax.com. Please note that Real Network's
Real Player or Microsoft Media Player is required to access the audio
webcast. They can be downloaded from http://www.real.com or
ots Original Text Service: Equifax Inc.
Contact: Investors - Marietta Edmunds Zakas, Corporate Vice
President, 404-885-8304, firstname.lastname@example.org, or Media - Carol
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both of Equifax Inc.
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