For more than 25 years, First Data and its subsidiary Cumberland Title quietly chipped away at building automation programs for the house settlement services and title industry. First through fax and telephone technologies and later with computer software, First Data helped the nation’s title and escrow offices reduce the tedium of assembling paperwork required for house closings. In other words, if you closed on a house purchase between 1975 and 2002, it was very likely that First Data Systems issued the paperwork. Real estate lawyers and title insurance agents alike relied upon DataClose, the company’s main product.

Edward Seddon, First Data’s president and founder, didn’t seem to mind that competitors began using his company’s model to build similar offerings, though that was a key warning sign. By the time Seddon’s apprentice Pat Vaden began running day-to-day operations at First Data, Texas-based insurer Stewart Information Services concluded it could audit its agents better with a product like First Data’s. Stewart spent roughly $15 million building its own version of title software called Landata and gave it to First Data, the national leader of its niche, to use at no cost.

A few years later, on Nov. 25, 2002, came the simple news release: “Stewart Information Services Corp. announced that its subsidiary Stewart Title Co. has acquired First Data Systems Inc. and Cumberland Title Co. of Nashville, Tenn.” Nothing very unusual, as announcements go—companies swallow other companies all the time. Yet, the release could just as easily have read: “Complacency fells national leader.”

First Data had been a growing powerhouse, opening branches in Memphis and Kentucky, but it failed to anticipate the full impact of the Internet. By the time First Data had hired a programmer from India to develop a Windows-based product, Stewart was already testing Landata, which cost much less than First Data’s prototype. Soon, it became clear that Stewart’s application was by far the most cost-effective option for First Data. In short order, the nation’s third-largest title insurer bought the company that revolutionized the industry.

So today First Data is left to peddle Stewart’s products, such as SureClose, while attempting to market itself as an independent company, which it is not. Vaden is convinced that First Data will “grow stronger because of the synergy that Stewart brought along with its investment,” but in reality nothing prevents Stewart from moving First Data’s staff into one of the floors of its Houston skyscraper.

In retrospect, Seddon might regret that his company didn’t hold its own in the industry it pioneered, but he is entitled to concentrate on the other highlights of his life. The 84-year-old native of Columbus, Ohio, is a well-known real estate tycoon in Murfreesboro, where he arrived in the mid-1950s to rebuild slums into affordable housing after graduating in the first post-war class of Harvard Law School. Giving a tour of his 50-acre estate and the mansion, which was inspired by Scarlet O’Hara’s abode, he tells stories of his daughter, Margaret Rhea Seddon, America’s second female astronaut.

It’s too bad, among these fascinating stories of a life strongly led, Seddon won’t be able to tell how First Data Systems became the Microsoft of the title and escrow industry.

IN THE NEWS

ANTIOCH—The Board of Foreign Missions, an Antioch-based subsidiary of the National Association of Free Will Baptists, was cited by the U.S. Office of Foreign Assets Control for attempted exportation of U.S. currency without a license in 2001, according to a bi-monthly report released by the U.S. Treasury unit that enforces economic and trade sanctions. While the $1,194 civil penalty has been marked as settled on the OFAC statement, a Board of Foreign Missions spokesman said in May that to his knowledge, the organization had not received such notice. The religious denomination of roughly 250,000 members nationwide began mission work in Cuba during the early 1940s, but later had to scale back its efforts there due to regime change.

BRENTWOOD—Hotly debated proposal for the Brentwood Community Hospital came to a head when the state’s Health Services and Development Agency voted 7-0 to deny it the certificate of need (CON) required for the hospital to be developed. Brentwood-based Healthcare Management Directions had been planning Brentwood Community Hospital as a one-story facility on Concord Road next to Brentwood Baptist Church. The new facility would offer in-patient and outpatient care, along with an emergency room and intensive care. One of the most outspoken opponents of the new 40-bed hospital was Williamson Medical Center in Franklin. The medical center is currently expanding its own facilities. Healthcare Management Direc- tions, founded in 2001, is working to collaborate with physicians and hospitals in developing and operating what it describes as efficient, high-quality, low-cost “smart hospitals.”

FRANKLIN—Franklin-based hospital company Iasis Healthcare will be acquired by an investor group led by Texas Pacific for roughly $1.4 billion. Iasis owns or operates 15 hospitals. It was formed in 1999 by JLL Partners, which will retain a stake in the company. The $1.4 billion price tag would deliver 2.1 times the initial investment to the company’s owners, with JLL landing roughly $420 million. Texas Pacific Group is a $13 billion-in-assets investment partnership.

Gallatin—The Robert Bosch Corp.’s chassis division is planning to close its Gallatin plant. About 480 employees have worked at the facility. The closure is expected to be complete by the end of 2007. Located at 375 N. Belvedere Drive, the plant manufactures brake master cylinders, which are distributed internationally. The Bosch plant is in a manufacturing-rich area of Gallatin, near other major operations including the Hoeganaes Corp. plant on Airport Road. Bosch company spokesperson Becky MacDonald said, “We are in a situation where we are facing increasing cost pressures in our entire brake system product line, and we are not able to operate the plant profitably.” MacDonald noted that the company simultaneously announced it is closing a second brake system products plant in Sumter, S.C. Other Middle Tennessee operations include a brake system products plant in Clarksville. That plant was not affected by the other closures, MacDonald said. The Clarksville plant manufactures hub and bearing assemblies, brake rotors, and front and rear corner modules, which are pre-assembled brake components. According to the Tennessee Department of Labor and Workforce Development, the employees at the Gallatin facility are not represented by a collective bargaining agreement.

MURFREESBORO—Greensboro, N.C.-based Bostic Builders, owned by former pro football players Jeff and Joe Bostic, will construct a student apartment complex, Campus Pointe, one mile from Middle Tennessee State University. The 196-unit complex is similar to another Bostic-built project now under construction near the University of Tennessee campus in Knoxville The company specializes in the student housing niche borne out of the fact that universities, more and more strapped for funding, haven’t been building as many dorm facilities in recent years. The project is scheduled to be completed before school starts in August. The Bostics are studying the possibility of completing similar projects at Austin Peay State University in Clarksville and East Tennessee State University in Johnson City.

NASHVILLE—Cooker Restaurant Corp., which filed bankruptcy in May 2001 and was unprofitable for years, shut down all of its remaining locations. During the past two years, the restaurant chain slimmed to 20 locations from 40, moving out of Virginia and Florida, where the chain had been based. The restaurant chain was founded in Nashville. Cooker’s eight directors recently pressed management to secure additional financing, but no additional financing was found. Cooker emerged from the Chapter 11 bankruptcy in October 2002, but failed to win back its shareholders’ trust and its customers’ loyalty. Cooker had four locations in Middle Tennessee which employed roughly 300 people, 25 of whom were full-time.

H.G. Hill Realty Co. detailed plans for its Green Hills site, most recently home of the H.G. Hill supermarket and strip mall. The $70 million development will be mixed-use, with two Class A office buildings and ample retail and restaurant space on the 10-acre site. Efforts will be made to give the property a human dimension, creating a streetscape and places to walk along a tree-lined avenue that will run from Hillsboro Road to Hillsboro Circle. Completion is expected in early 2006.

Business Tennessee’s online companion, NashvillePost.com learned that the local co-founder of Houston’s Restaurants is selling his stake in the successful, nationwide, closely held company back to its owners, principally co-founder George Biel. Joe Ledbetter, who was based in Nashville and for years oversaw new site selection for the legendary chain, appears possibly to have netted nine-figure proceeds from the sale of his stake in Houston’s. His exact percentage ownership stake in the company could not be determined, though several sources believe it to have been 30% to 50%. Ledbetter and Biel opened Houston’s original unit in Nashville in 1977, on the site of the former Western Auto store at 3000 West End Ave. Houston’s currently has 42 restaurants nationwide, according to the company Web site.

Marsh & McLennan Companies announced plans to acquire Kroll Inc., a risk mitigation services company. Under the companies’ agreement, MMC will acquire Kroll in an all-cash $1.9 billion transaction. Kroll’s Background America division is located in Nashville and is headed by Mike Shmerling, who is also executive vice president of the parent corporation. Shmerling founded Background America in 1995 and sold it to Kroll in 1999. Based on his ownership of 523,282 Kroll shares, Shmerling’s proceeds should be $19.4 million.

SHELBYVILLE—The longtime family-owned Shelbyville Times-Gazette news- paper was sold to Rust Communications, a media company based in Cape Girardeau, Mo. The 8,200-circulation Shelbyville paper had been owned by David and Nina Gay Segroves. With the acquisition, family-owned Rust has two newspapers in Tennessee, including the State Gazette in Dyersburg. Rust owns about 50 newspapers and has partial ownership in 17 radio stations. Hugh Jones, a native of Murfreesboro with ties to Courier Printing in Smyrna, is the new publisher of the Shelbyville newspaper and will be part owner.

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