Mellon Financial is to sell its human resources consulting and outsourcing businesses to Affiliated Computer Services (ACS) for $445 million in cash.
Under the terms of the transaction, which is scheduled to close by the end of the second quarter, Mellon will book a first half after-tax loss of $75 million from discontinued operations and disposal costs.
In a statement, Mellon says ASC will offer employment to "virtually all" of the nearly 4000 employees in the division. ACS also is acquiring the operations and infrastructure associated with those businesses and will purchase or assume leases on substantially all facilities included in the transaction, including several call centres.
Mellon will retain its shareholder services group, Mellon Investor Services, which is closely aligned with the company's other core processing businesses of asset servicing and cash management.
Martin McGuinn, Mellon chairman and CEO says: "MIS provides Mellon with a considerable level of cross-sell opportunities, and because of competitor consolidation and the excellent reputation for quality service, we have a solid pipeline of new business opportunities."
MIS currently services some 1300 companies and about 20 million shareholder accounts. The unit will become part of Mellon's new payment solutions & investor services group, which will be headed by James Aramanda, a Mellon vice chairman who previously headed the HR&IS sector. Julian Clark will continue to oversee the investor services business.
Also in the sector are Mellon Global Cash Management and the recently-acquired SourceNet Solutions finance and accounting business process outsourcing (BPO) services, both managed by Robert W. Stasik.