Magazine article American Banker

N.Y. Investment Firm Buys Penney's Processing Unit

Magazine article American Banker

N.Y. Investment Firm Buys Penney's Processing Unit

Article excerpt

Welsh, Carson, Anderson & Stowe has made another significant investment in the credit card world.

The New York investment firm, known for its portfolio of bank technology and payment service companies, acquired the transaction processor BSI Business Services Inc. from J.C. Penney Co., Dallas.

The buyer did not disclose a price, but in published reports it was estimated to be $100 million.

The deal was completed in January, on the heels of Welsh Carson's acquisition of a majority interest in World Financial Network, the credit card bank established by the Limited, the Columbus, Ohio-based retailer. That purchase cost $165 million.

Until these latest forays, Welsh Carson's most notable investment came in 1992, when it managed the spinoff of Citicorp's merchant credit card unit, Card Establishment Services. Its payoff came last year with the sale of CES to First Data Corp. for about $680 million in stock and assumption of debt, four times the purchase price.

This week Welsh Carson said it named Ralph E. Spurgin president of BSI. He previously had been president and chief executive of World Financial Network.

Mr. Spurgin has led the Limited's credit card division since 1986. Prior to that, he worked in J.C. Penney's credit division for 20 years, rising to general manager in charge of credit planning and development.

Anthony de Nicola, general partner of Welsh Carson, said Mr. Spurgin's experience with both retailers will help in his new posts. Mr. de Nicola said Mr. Spurgin's near-term objective is to identify opportunities where the companies complement one another, and to develop a longer-term strategy for the credit card and transaction processing industries. …

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