Citi to Acquire BISYS for $1.47 Billion; Crump to Get Insurance Group

May 2, 2007

Financial services outsourcing firm and insurance wholesaler BISYS has agreed to be acquired by global financial giant Citi. Under the deal, Citi would acquire all of the outstanding shares of BISYS in a transaction valued at approximately $1.47 billion.

At closing, Citi said it will sell the Retirement and Insurance Services Divisions of Bisys to affiliates of J.C. Flowers & Co. LLC, which owns Crump, making the net cost of the transaction to Citi approximately $800 million. The Insurance Services Group provides independent wholesale distribution of life insurance and commercial property/casualty insurance, among other activities.

Citi would combine BISYS Fund Services and Alternative Investment Services, which provide administration and distribution services for mutual funds, hedge funds, private equity funds, and other investment products, with its own investment industry operations.

JC Flowers will be combining BISYS Commercial Insurance Service with Crump. In addition, JC Flowers said its acquisition of BISYS’ life insurance and retirement services business has the potential for creating a leading integrated provider of wholesale insurance brokerage and retirement services.

Under the terms of the transaction, BISYS shareholders would receive $12.00 in cash per share, consisting of $11.85 per share to be paid by Citi at the closing of the acquisition and a special dividend of $0.15 per share in cash payable by BISYS, and conditioned upon the closing of the acquisition, for total consideration of $1.47 billion.

The boards of directors of Citibank and BISYS as well as a special committee of independent directors of the BISYS board have each unanimously approved the transaction, according to the parties. The transaction is expected to close in the second half of this year. It is subject to BISYS shareholder approval and to regulatory approvals in the U.S, Ireland and Bermuda.

The BISYS Group, Inc. provides outsourcing services for the investment and insurance industries. Its Investment Services group provides administration and distribution services for mutual funds, hedge funds, private equity funds, retirement plans, separately managed accounts, and other investment products. Through its Insurance Services group, BISYS is a national distributor of commercial property/casualty insurance, long-term care, disability, and annuity products.

The BISYS Group, Inc. was founded in 1989 through acquisition from ADP and had its initial public offering in 1992. It has grown through numerous acquisitions including in 2001, Insurance Exchange of America, Inc. (IXA), the Toner Organization and Life Brokerage Corp.; in 2002, Harrison James Group, LLC and Career Brokerage (aka Feingold Scott, Limited); in 2003, commercial insurance brokers Tri-City Brokerage and USA Insurance group; in 2006, Ratner Associates and D&O Concepts, a specialist in professional legal liability and JCH Insurance Brokers, which focuses on environmental risk management; and in 2007, Truckwriters, Inc., a Zurich program for trucking and transportation risks nationwide.

Citi is a global financial partner in banking, capital markets, and transaction services.

Sources: BISYS
www.bisys.com.

Citi
www.citigroup.com

Topics Mergers Agencies

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