Citigroup to acquire Bisys for $1.45 billion

Our Corporate Bureau
02 May 2007

Mumbai: Citigroup Inc., the largest US banking group, has agreed to acquire financial services firm Bisys Group Inc. for $1.45 billion to increase its services offerings to hedge funds and private equity firms.

Citigroup said it would keep Bisys' fund services and alternative investment services units in its global transaction services unit, which holds securities, processes stock and bond trades, and offers cash management services.

Citigroup plans to sell Roseland, New Jersey-based Bisys' retirement and insurance services units to private equity firm JC Flowers & Co. for about $645 million. The net cost of acquisition would thus be $800 million.

Bisys shareholders would receive $11.85 per share in cash, 3.3 per cent more than the last closing price. They would also receive a 15 cent per share dividend payable by Bisys, netting an additional $18 million. The transaction will end Bisys' nine-month review of strategic alternatives.

Bisys employees, numbering close to 5,000, will be divided equally among units going to Citigroup and Flowers, a Citigroup spokeswoman said.