Headlines:
Fidelity CFO: Spinoff in 2 Years
The chief financial officer at Fidelity National Financial Inc., the Jacksonville, Fla., title insurer, said it will probably take its bank technology unit public within two years.
A spokesman said it would retain a majority stake in the unit, Fidelity Information Services Inc., which also holds hold the rest of Fidelity National's noninsurance operations.
Fidelity National announced March 9 that it had completed the recapitalization of the unit using $2.8 billion in a new credit arrangement from a consortium of lenders led by Bank of America Corp., JPMorgan Chase & Co., Wachovia Corp., Deutsche Bank AG, and Bear Stearns.
Most of that money, paid by the unit to the parent, will be passed along to stockholders in the form of a special cash dividend of $10 per share. The maneuver in effect separated the unit from the parent financially, clearing the way for Fidelity Information Services to receive a payment of $500 million from two private-equity groups, Thomas H. Lee Partners LP of Boston and Texas Pacific Group of Fort Worth, for a 25% stake.
In December, Fidelity dropped a plan to spin off the unit when the Lee and Texas Pacific groups struck the investment deal.
Alan Stinson, an executive vice president at Fidelity and its CFO, said Tuesday that the structure of the deal provides a new reason to take the unit public. "Private equity investors typically aren't going to make a minority equity investment without some exit strategy," he said at a Piper Jaffray Cos. investment conference in New York. "In all likelihood the public offering will occur within two years of their investment."
The spokesman said that if it did not, contractual provisions that would require some sort of exit strategy within another three years.
Boeing CU Encrypting Records
For nine months Boeing Employees' Credit Union in Tukwila, Wash., has been encrypting every new customer record it stores on tape.
"It's real simple. If we put it on tape, it's encrypted," said James P. Ratchford, the director of IT infrastructure at the $5.2 billion-asset credit union.
It began using Decru Inc.'s DataFort T-Series appliances on its data network last June to encrypt data on tape, Mr. Ratchford said March 8.
Decru, of Redwood City, Calif., announced the credit union as a customer the day before. Mr. Ratchford said he was not involved in the timing of the announcement, which came 10 days after Bank of America Corp. disclosed that a tape containing personal data on 1.2 million customers had been lost while in transit to a storage facility.
"We all suffer from this particular challenge," Mr. Ratchford said. "I'm empathetic toward the problems that other institutions have. We're doing the kind of things that are necessary to protect our membership."
He said that in 2003 the credit union identified taped data as a security risk that could be reduced.
The staff tested approaches based on hardware and software. "The hardware appliance was less intrusive and so easier to work with," Mr. Ratchford said.
