The business process outsourcing provider Automatic Data Processing Inc. has spun off its brokerage services group.
The new company, Broadridge Financial Solutions Inc., began trading Monday on the New York Stock Exchange. It provides transaction processing services to brokerages.
Rich Daly, Broadridge's chief executive, said independence will make the operation more nimble.
"Being part of the financial services industry, we need to move at a very fast pace," Mr. Daly said in an interview Monday.
When the outfit was an ADP group, Mr. Daly said, "anything of any material size would have to go to corporate for approval."
"We are now corporate," he said. "We can be far more agile."
Strategic ventures — for example, starting a joint venture — can happen much faster now, he said.
The corporate cultures were somewhat different; the brokerage services group focused on financial services, whereas ADP served a much wider array of industries. The two also had separate sales teams.
Ivan Feinseth, the research director at Matrix Investment Research LLC in New York, said Broadridge "will probably do pretty well" on its own.
"As part of ADP, it was one of their best businesses," he said, even though ADP was better known for its employer services operations.
"There's a policy in corporate America to sell your best businesses … in an attempt to unlock shareholder value," Mr. Feinseth said. "To me, it's like pulling the flowers and watering the weeds."
According to a research note that Merrill Lynch research analyst Gregory Smith published in March after an ADP investor meeting, ADP expected the spinoff to eliminate $30 million in costs, generate a $690 million dividend, and produce another $60 million in repatriation. ADP said at the time that it would use the cash to repurchase its own shares.
The spinoff would help ADP "focus on its higher growth business," wrote Mr. Smith, who was not available for an interview Monday.
Mr. Daly said the brokerage services group had become a key player in the financial services industry. "Everybody is touched by Broadridge if they're an investor," he said. "Most of them don't know the really active role we play behind the scenes."
Broadridge's stock price did not change much on its first day of trading. By midday it had dropped just 1.02% from its initial price of $19.70 to $19.50.
At ADP, Mr. Daly was a group president. He said much thought went into the spinoff's identity. " 'Broad' covers the vast array of products, and that 'ridge' is, we're the highest of what we do in that space."
