Magazine article American Banker

Shawmut to Buy Payroll Servicer for $12M

Magazine article American Banker

Shawmut to Buy Payroll Servicer for $12M

Article excerpt

Shawmut National Corp. has signed a definitive agreement to buy Interpay Inc., a Mansfield, Mass.-based payroll services company, for $12 million in cash.

Interpay, which provides direct deposit, electronic tax filing, 401(k) investment deductions, and other services, has 15,000 business clients in New England and the Middle Atlantic states.

For Shawmut, a $34 billion-asset bank based in Hartford, Conn., and Boston, the deal offers a wealth of opportunities to cross-sell its own products and services.

"Interpay is an ideal fit with our strategy to expand our nonbranch, electronic-based retail franchise as well as our small-business franchise," said Joel B. Alvord, Shawmut's chairman and chief executive officer.

The deal is expected to close in the third quarter, bank officials said. Shawmut itself is to be acquired by Fleet Financial Group Inc., Providence, R.I. The merger will create a superregional that will rank among the Top 10 U.S. bank holding companies in asset size.

Shawmut will market Interpay's payroll services to its 50,000 small and medium-size corporate customers.

Likewise, Interpay's business customers, who employ 200,000 workers, will be targeted by such marketing campaigns as Shawmut's Bank-At-Work consumer program - a package of preferred banking products and services.

Shawmut will own just less than 50% of the company and its two independently owned franchises in Connecticut and New Hampshire.

The deal will return Shawmut to the payroll services business. It had sold its client base of 2,000 businesses to Control Data Corp., now Ceridian Corp., Bloomington, Minn., in 1984.

Shawmut, BankAmerica Corp., and many other institutions sold their payroll service businesses to the likes of Automatic Data Processing Corp., Roseland, N.J., and Ceridian during the last 10 years, according to Peter Galligan, Shawmut's senior vice president. …

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