In one fell swoop on Wednesday, SafeCard Services announced its first cobranding deal -- in conjunction with SunTrust Banks Inc. -- and outlined plans to reorganize into a holding company with a new name.
The holding company, Ideon Group Inc., will operate under an office of the chairman with strategic business units as subsidiaries.
"This really positions us to turn into a high-growth company because we're going to be multiple units with entrepreneurial managers running each unit," said Paul G. Kahn, chairman and chief executive.
Those units include the core credit card registration business, SafeCard Services Inc. in Cheyenne, Wyo.; Wright Express, a Portland, Maine-based provider of enhanced payment and information services to commercial vehicle fleets; a credit card marketing and servicing business, Ideon Card Services Corp., in Jacksonville, Fla.; plus future new businesses.
SunTrust BankCard in Orlando, Fla., will issue Ideon Card Services' first cobranded offering -- a Professional Golfers Association Tour Partners credit card -- in March. Pricing and rebates of the MasterCard product have not been determined.
"The program with SunTrust allows us to go forward now aggressively with this whole credit card marketing and servicing enterprise," Mr. Kahn added.
"It fits extremely well strategically for the direction we're heading into the next two or three years," said William J. Moore, president and chief executive of SunTrust BankCard. "It opens us up to the whole country."
SunTrust BankCard has 700,000 accounts and $680 million of outstandings, which represent consolidated SunTrust bank card programs in Georgia and Florida. As SunTrust enters more cobranding arrangements, Mr. Moore said, he expects to grow the portfolio to between $2.5 billion and $3.5 billion within four years. "SafeCard should give us growth that would approach that level."
The PGA card should bring in 500,000 to one million cardholders within two years, Mr. Kahn said.
"The PGA is a very large, credible organization," said Stephen D. Drees, senior vice president of Affinity Partners Inc., a consulting firm in Wellesley Hills, Mass. "Golf is definitely a large interest group and it's growing."
But, he added, there have been a number of affinity cards aimed at golfers over the past decade, from Mellon Bank, Bank of New York and MBNA Corp., so the idea is not new.
"The demographics of that market fits closely for the same target market we'd like to bring in," Mr. Moore said.
Safecard previously announced a partnership with the PGA Tour to assume management of the PGA Tour Partners, a program which allows golfers and PGA Tour fans to become directly involved in the tour.
A cobranded card will be offered to all PGA Tour Partners participants who qualify. Cardholders can redeem points to earn discounts on PGA Tour events, members-only tournament play, golf clinics instructed by PGA Tour players, and PGA merchandise.
Ideon Card Services will market the card to the estimated 25 million avid golfers in the Country through direct mail, plus radio and television promotions connected to PGA tournaments.
In connection with the reorganization, Mr. Kahn also announced the election of John R. Birk, president and chief executive officer of Wright Express, as SafeCard's president and chief operating officer, effective Jan. 1. He will join Mr. Kahn and SafeCard vice chairmen Francis J. Marino and G. Thomas Frankland as members of the new holding company's office of the chairman.
Mr. Kahn said the idea behind calling the holding company Ideon Group was to highlight innovation and ideas for the future. It fits in with the strategy of moving from a single product to a multiple product and service company, he added, and will promote higher revenue and earnings growth.
The former chief executive of AT&T Universal Card Services, who took over SafeCard last Year, said the company wants to distance itself from a name that recently has been associated with litigation.
"We are a new company, we are totally different from the SafeCard Services of the past," Mr. Kahn said.
"There seems to be a lot of residual memories of the bad years of SafeCard from the 1987-88 time frame. This and the new stock ticker symbol will tell people this is no longer the SafeCard of old."
