Unisys Corporation announced it has signed a memorandum of understanding with Barclays Bank and Lloyds TSB to run their check processing operations in the United Kingdom through a new subsidiary.
The transaction is subject to the completion of definitive agreements as well as regulatory approval in the United Kingdom. If finalized, Unisys potentially could realize revenues of more than $750 million over 10 years.
The company could begin operations as soon as November 2000 under the name Intelligent Processing Solutions Limited (iPSL). The new subsidiary would be 51% owned by Unisys, with Barclays and Lloyds TSB each holding a 24.5% stake to ensure that their customers` interests continue to be safeguarded and reflecting their confidence in the future of the new company.
With increased levels of electronic banking leading to a decline in the volume of checks being processed, fixed costs make processing each check more expensive. iPSL will deliver economies of scale which will help contain costs as check volumes decline.
"We plan to create an environment where development and technology investment can be shared to deliver enhanced process and product efficiencies for Unisys clients," said John Smith, Unisys director of UK Global Industries Finance. "We bring to this venture Unisys experience as a provider of world-class, mission-critical outsourced managed services on a 7-by-24 basis."
Other organizations may become customers of iPSL; the company and its partners intend to market check clearing services and potentially other back office services to all companies requiring them. Girobank, Co-operative Bank and National Australia Group (Clydesdale Bank and Yorkshire Bank) - all of whom are Unisys check clearing customers - intend to support the new venture, which will also process work on their behalf.
The core employees of the new venture will come from the three partners` existing workforces in the United Kingdom. The venture partners are working closely with the unions to ensure that the interests of all staff involved are properly represented.
John Smith commented, "With over 50% of the world`s checks processed on Unisys equipment, Unisys has already shown its strong track record in this area. This agreement recognizes the technical excellence of Unisys people, demonstrated through payment processing work for our existing customers. Our aim is to be the supplier of choice to the payment paper processing market."
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Unisys
Unisys is an electronic business solutions company whose 36,000 employees help customers in 100 countries apply information technology to seize opportunities and overcome challenges of the Internet economy. Unisys people integrate and deliver the solutions, services, platforms and network infrastructure required by business and government to transform their organizations for success in this new era. The company offers a rich portfolio of Unisys e-@ction Solutions for electronic business based on its expertise in vertical industry solutions, network services, outsourcing, systems integration and multivendor support, coupled with enterprise-class server and related technologies. The primary vertical markets Unisys serves worldwide include financial services, transportation, communications, publishing and commercial sectors, as well as the public sector, including federal government customers. Unisys is headquartered in Blue Bell, Pennsylvania, in the Greater Philadelphia area. For more information on the company, access the Unisys home page on the World Wide Web at www.unisys.com. Investor information can be found at www.unisys.com/investor.