Two firms buying piece of govWorks
- By Dan Caterinicchia, Dan Caterinicchia
- Jan 10, 2001
American Management Systems Inc. and eOne Global LP, a developer of Internet-based
payment technologies, announced Wednesday that they have signed a letter
of intent to buy govPay, the transaction-processing business of embattled
GovPay provides state and local governments with the tools for online
payment of taxes, utility bills and parking violations, as well as for securing
recreational and other governmental permits using the Web.
GovWorks was in the news in November when it laid off employees as part of a restructuring
effort, according to David Camp, vice president of marketing for the New
York City-based company.
Under the terms of the letter of intent, eOne and AMS will jointly acquire
the govPay payment processing software and related assets from govWorks.
Also, eOne will operate the govPay business including servicing existing
contracts and will assume responsibility for about 35 govWorks employees.
"We have expanded our capabilities to serve the needs of customers at
the state and local levels," said Garen Staglin, president and chief executive
officer at eOne. "In places like New York City, people can now pay traffic
tickets online thanks to govWorks and govPay," and there are more than 20
similar systems in place throughout the country.
The eOne Cashtax operation has been handling electronic payments for
local, state and federal governments for more than 15 years, including for
the Internal Revenue Service, California, New York and Texas, Staglin said.
Each year, Cashtax processes more than 36 million payments for more than
2 million taxpayers, totaling more than $1 trillion in federal, local and
AMS and eOne have a joint marketing agreement, and in addition to cash,
AMS also will contribute all of its current investments in govWorks as part
of the purchase price.
The sale of govPay is to be completed in the context of the Chapter
11 reorganization process being pursued by govWorks. The parties anticipate
that eOne and AMS will assist in funding govPay business operations pending
the closing of the sale.
"We're waiting on the formality of a bankruptcy proceeding and expect
that to be a four- to six-week activity," Staglin said, adding that the
parties have begun account planning and technology integration.
Linda Morse, chief operating officer of govWorks, said the sale of govPay
was a "wonderful opportunity for us to speed up the growth of eOne and govPay."