Banking giant Citi has agreed to acquire BISYS in a deal valued at $1.45 billion (€1.1 billion). Under terms of the agreement, shareholders of the outsourcing company will receive $12 in cash per share; BISYS will pay $0.15 per share, while Citi will pay $11.85 per share.
Citi has said it will combine BISYS’ Fund Services and Alternative Investment Services – which provide administration and distribution services for private equity funds, mutual funds, hedge funds and other investment products – with its own operations.
It will sell BISYS’ Insurance Services Group and Retirement Services to private equity firm JC Flowers, which will combine the divisions with its existing commercial insurance business, Crump. BISYS is America’s largest wholesale distributor of life insurance.
Terms of the Citi-JC Flowers aspect of the transaction were not disclosed.
The deal is expected to close in the second half of 2007, and is subject to BISYS shareholder approval as well as regulatory approvals in the United States, Ireland, and Bermuda.
Bear Stearns is serving as financial advisor to BISYS, while Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel.
Merrill Lynch is serving as financial advisor to the special committee reviewing the agreement, while Paul, Weiss, Rifkind, Wharton and Garrison is serving as legal counsel.