TSYS Will Go Independent Through Spin Off

TSYS, a card processor and provider of a debt collection program for financial insitutions, will be spun off by its owner Synovus Financial Corp., TSYS announced yesterday. Columbus, Ga.-based TSYS will become an independent company following the spin off.

Prior to the spin off, TSYS will pay a one-time $600 million cash dividend to its shareholders including Synovus, the owner of 80.8 percent of TSYS shares. TSYS shareholders will receive a cash dividend of $3.04 per share based on the number of TSYS shares outstanding as of Sept 30, TSYS reported.

The board of TSYS must still determine the record date of the spin off which was tentatively set at Dec. 18, according to a press release. Synovus shareholders “can expect to receive” 0.49 shares of TSYS common stock for each share of Synovus they own, according to the release. The final distribution will be based on shares owned on the distribution date.  

TSYS Chairman and CEO Philip W. Tomlinson said in a statement that going independent will allow TSYS to expand internationally, make acquisitions, and diversify its shareholder base.

Tomlinson told analysts this morning during a conference call that TSYS will soon be aggressive in making acquisitions. “This gives us more flexibility. Don’t expect anything (in 2006). Next year you will see something,” said Tomlinson. “We are looking at properties that are card related and merchant related. We previously were limited on the size of any transaction.”

Tomlinson also said the company is looking to expand its merchant business, grow internationally, and focus on loyalty programs but didn’t provide any details.

The spin off is scheduled to be completed by the end of the year and requires approval by the Georgia Department of Banking and Finance.

On Monday, TSYS reported third quarter net income of $54.3 million, up nearly 27 percent from the third quarter of 2006. Revenues were $457.6 million, up about 4 percent.

TSYS division TSYS Collections and Recovery System manages the collections and recovery inventory for financial institutions nationwide. In the third quarter TSYS signed Commerce Bancorp. of New Jersey as a client, and will provide collection services on Commerce’s entire delinquent and charged off card and installment accounts, including auto loans and mortgages. 

Synovus is a Columbus, Ga.-based financial services holding company with more than $34 billion in assets.