US electronic payment processor TSYS is to spin off from its parent company, Georgia-based financial services house Synovus, and become fully independent.
Formed by Synovus in 1983, TSYS has grown to become the largest third-party card processor in the US and one of the largest outsourced transaction processing vendors in the world.
Synovus, which currently owns 80.8% of TSYS, will distribute all of its shares of TSYS common stock to Synovus shareholders.
Based on the number of Synovus and TSYS shares outstanding as of 30 September 2007, Synovus shareholders will receive about 0.49 shares of TSYS stock for every one share they own of Synovus. But this distribution ratio is subject to change, says TSYS.
Under terms of the agreement, TSYS will pay a one-time cash dividend of $600 million to all TSYS shareholders, including Synovus. Based on the number of TSYS shares outstanding as of 30 September 2007, TSYS says it expects its shareholders to receive a cash dividend of about $3.04 per share.
Commenting on the spin-off, Philip Tomlinson, chairman and CEO of TSYS, says: "This transaction allows for broader diversification of our shareholder base; more liquidity in our shares; additional investment in strategic growth opportunities and potential acquisitions; and the opportunity for shareholders to value TSYS as a stand-alone, pure play in the payments processing market."
In a statement, Richard Anthony, Synovus chairman and CEO, says: "The Synovus board of directors believes that the spinning-off of TSYS will provide both companies opportunities to strategically accelerate growth."
The transaction is expected to be completed by the end of 2007, subject to certain conditions, including the approval of the Georgia Department of Banking and Finance.