Here is the text of CEO James Orr's interview of yesterday. The interview was given at the time of the IPO.
INTERVIEW - Convergys CEO sees untapped
potential
By Stephanie Borise
NEW YORK, Aug 13 (Reuters) - Convergys Corp., the customer service and billing arm of Cincinnati Bell Inc.(CSN - news), aims to expand through internal growth and acquisitions after its IPO on Thursday, the first stage in an eventual spin-off, its chief executive said.
Speaking in a telephone interview from his Cincinnati headquarters, Convergys CEO and President James Orr told Reuters he aimed to make Convergys a one-stop service center for its customers -- cable operators and communications carriers such as AT&T Corp. (T - news). In addition, he sees the potential to tailor the company's billing and customer service software to other industries.
''(It) could have other applications in other industries like utilities,'' Orr said. ''We certainly think there are opportunities there, and we'll look at it very carefully.''
The company's operations combine Cincinnati Bell Information Systems (CBIS), which produces more than 360 million bills for clients each year, and MATRIXX Marketing, which handles 365 million calls annually at more than 30 call centers throughout the United States. In 1997, those two units generated sales of $987.5 million.
Orr said revenues in the past three years had grown at a compound rate of 20 percent annually. While declining to comment on whether he expected the momentum to continue, he said, ''We are certainly focused on rapid growth in our business.''
Cincinnati Bell will retain a 90.7 percent interest in Convergys for the next few months, when it will spin off its stake to Cincinnati Bell shareholders.
''We said (the spinoff) would happen within six months of the IPO, but it could well happen before the end of the year,'' he said.
At that time, Orr said he plans to resign his post as chief operating officer of Cincinnati Bell and ''spend all of my time and energy building Convergys.''
Orr would not speculate about any potential targets, but he said acquisitions were likely, noting that parent company Cincinnati
Bell has a history of making acquisitions.
''We made acquisitions in the past for our information management business, where we gained additional market share in the cable billing business.... So I think you can expect that we will consider those things.''
Cable operators are an obvious target for growth as they no longer hold monopolies on pay channels. Now, cable companies have to compete against a host of rival services, including direct broadcast satellite services, which are forcing them to create brand loyalty by improving relationships with their customers.
Convergys raised a little less than $200 million in net proceeds from the initial public stock offering, which it will use to pay down some of its $700 million of debt and to move away from a stepchild role at Cincinnati Bell by combining its two operations.
Part of Orr's plan includes stepping up its online customer service business to appeal to a broader range of clients.
''We're looking at providing online dedicated customer service or technical help desk work for major corporations,'' he said.
Shares in Convergys closed 1-5/8 higher at 16-5/8 on the New York Stock Exchange, on volume of about 5.8 million shares.
The 13 million share offering opened at 15-3/4, up 3/4 from the $15 price set for its debut Thursday morning.
Morgan Stanley, the deal's lead underwriter, announced a cut in the size of the IPO after the close of trade on Wednesday from the 18 million shares originally filed, and also trimmed the price range from $17-$19.
Now on the issue of renaming the thread, you have a good point -- CSN is a good stand-alone company with the telecommunications business in its southern Ohio and northern Kentucky service area. This telecomunications business is viable and the kicker of Ameritech partnership in personal communication services, pcs, is hell of a kicker. Perhaps we should rename the thread "CSN - Cincinatti Bell" to convey the nature of the remaining company. Tell me what you think.
P.S. Here is the mailing address of the Cincinnati Bell dividend reinvestment plan, DRIP. If you want to buy additional shares of CSN without paying brokerage commission, the DRIP is for you.
Cincinatti Bell
c/o Corporate Trust Services
38 Fountain Square Plaza
Cincinatti, OH 45273-9611
The transfer agent handles the DRIP. So you must make the check out totransfer agent: Third Fifth Bank. Note the check is for the CSN DRIP and include your SSN. |
