Magazine article American Banker

TSYS Relishing Leeway Promised through Spinoff

Magazine article American Banker

TSYS Relishing Leeway Promised through Spinoff

Article excerpt

Total System Services Inc. has detailed some of its plans, including increasing its presence abroad, for after its planned spinoff from Synovus Financial Corp.

The Columbus, Ga., bank holding company announced the spinoff plan last month, though observers had long predicted such a move, saying that Synovus' ownership had restricted TSYS' ability to expand.

"Synovus has been as good a parent as we could ever have," Philip W. Tomlinson, TSYS' chairman and chief executive, said in an interview Tuesday, but parents must eventually let go, and he said he is very excited about TSYS' coming independence.

The spinoff will "free us up to do some things that we haven't been able to do in the past," Mr. Tomlinson said.

Mr. Tomlinson told analysts at a Tuesday investor day presentation in New York that the spinoff would create "a truly independent TSYS" and that the separation "gives us so much more flexibility than we had in the past. We're no longer disadvantaged in the acquisition business. We can compete head-to-head with our peers."

Synovus owns more than 80% of TSYS. The spinoff is expected to be completed by yearend, and the banking company's shareholders will get 0.49 share of TSYS stock for every share they have of Synovus stock.

Mr. Tomlinson said that dealmaking will be an important part of TSYS' international growth strategy. He spotlighted consolidation in Europe as an opportunity for TSYS.

"We are incredibly enthusiastic about what's going on internationally," Mr. Tomlinson told analysts. "We believe that Europe is very similar to what the U.S. was in the '80s and '90s. There is going to be massive consolidation, and now we can be a part of it."

TSYS already has footholds in several regions. It has had an office in the United Kingdom since 1999 and last year began a joint venture, TSYS Managed Services EMEA, with Dimension Data PLC of Johannesburg. …

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