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Sedgwick Buys Benefit Manager VPA Visa Switch Hurts Holographics Vendor CheckFree, Sprint Nextel Unit Sign Deal PayPal Gets Pair of Awards for Web Site
Sedgwick Buys Benefit Manager VPA
Sedgwick CMS Inc., an insurance claims manager partially owned by Fidelity National Financial Inc., has acquired VPA Inc., a Calabasas, Calif., company that, like Sedgwick, manages health-benefit programs for large employers.
Fidelity National, the nation's largest title insurance company, which is breaking down its holding company structure, announced the deal Tuesday.
William P. Foley 2d, the Jacksonville, Fla., company's chairman and chief executive and the chairman of Sedgwick, said in a press release that the acquisition was a "milestone" toward the goal of building Sedgwick's revenue base to $1 billion over the next 18 to 24 months.
The deal is the first for Sedgwick since Fidelity acquired a 40% stake in the Memphis company on Jan. 31. The private equity firms Thomas H. Lee Partners and Evercore Capital Partners bought the rest as part of the same transaction.
Frank J. Huffman, a senior vice president at Sedgwick, would not say how much it paid for the privately held VPA, which generated about $20 million of revenue last year. Sedgwick had $398 million.
The VPA deal was announced two weeks after Fidelity announced plans to spin off its majority-owned bank-technology operation, Fidelity National Information Services Inc., which became a publicly traded company in March after merging with the St. Petersburg, Fla., payment processor Certegy Inc.
The separation of the title insurer and the technology company is expected to take 90 to 150 days.
Visa Switch Hurts Holographics Vendor
American Bank Note Holographics Inc. said it expects sales to fall as a result of Visa International's decision to stop using the company's magnetic-stripe product.
The Robbinsville, N.J., company said Monday that its first-quarter net income rose 67% from a year earlier, to $1 million, or 6 cents a share. However, Kenneth H. Traub, the company's president and chief executive, said in a press release that the results were "significantly impacted" by Visa's decision.
Revenue climbed 56%, to $10 million, primarily on higher sales of the HoloMag product, a holographic film that functions as the stripe on the back of a credit or debit card and can also carry companies' logos.
Visa issuers began distributing cards with the film in January, but in March the San Francisco card association said that the material could hold a static charge, which sometimes prevents readers from authorizing transactions at the point of sale. Visa said it would go back to using the dove hologram logo that has long appeared on the front of its cards.
Calls to Visa were not returned.
As a result of the switch, American Bank Note said in March that it took a fourth-quarter charge of $5 million, leading to a loss of $2.8 million, or 15 cents a share, compared with a profit of $500,000, or 2 cents a share, for the fourth quarter of 2004.
Mr. Traub said Tuesday that sales probably will decline this quarter, he said, though he did not say by how much.
The vendor said it is working on a second generation of the product.
CheckFree, Sprint Nextel Unit Sign Deal
CheckFree Corp. has agreed to sell mobile phone time to customers of Sprint Nextel Corp.'s Boost Mobile LLC at its walk-in bill payment centers.
The Atlanta bill payment company announced the deal, with Boost Mobile, of Irvine, Calif., on Tuesday. Customers can buy minutes for amounts ranging from $20 and $99 at 11,000 CheckFree centers.
PayPal Gets Pair of Awards for Web Site
PayPal Inc.'s Web site has won two awards from the International Academy of Digital Arts and Sciences.
The person-to-person money transfer unit of eBay Inc. said Tuesday that it won both the 2006 Webby award for Best Financial Services Web site and the People's Voice award, which is voted on by regular Internet users, in the financial services category.
Last week PayPal began offering its customers free credit alerts from Equifax Inc. of Atlanta. The service provides e-mail alerts whenever there is an inquiry about a person's credit file, which could be a sign of identity theft. If there are no credit inquiries in a given month, the customer receives an e-mail saying so.
PayPal also provides alerts when a user's credit card balance changes by a certain amount.
