Enter multiple symbols separated by commas

Citigroup to Buy Bisys for $1.45 Billion

Citigroup said it agreed to buy Bisys Group for $1.45 billion, and then sell two of the financial services processor's units to private equity firm J.C. Flowers & Co.

Bisys shareholders will receive $11.85 a share in cash, 3.3% more than the Tuesday closing price, plus a dividend of 15 cents a share, making the total purchase price $1.47 billion. The net cost to Citigroup will be about $800 million after the J.C. Flowers transaction.

Citigroup, the largest U.S. bank, will keep Bisys' investment services division, which includes fund services and alternative investment services units. It said the purchase will help it provide more services to hedge funds, mutual funds and private equity firms.

At closing, Flowers affiliates will acquire Bisys' retirement and insurance services units from Citigroup.

The transaction ends a nearly nine-month review of strategic alternatives by Roseland, New Jersey-based Bisys.

Last year, Bisys agreed to pay $25.1 million to settle a U.S. Securities and Exchange Commission probe into its payment of marketing and distribution costs for shares of some mutual fund clients. It also restated more than three years of results after uncovering accounting errors.

Citigroup's investment bank advised Citigroup on the transaction. Bear Stearns and the law firm Skadden, Arps, Slate, Meagher & Flom advised Bisys. Merrill Lynch and the law firm Paul, Weiss, Rifkind, Wharton & Garrison advised a committee of independent Bisys directors.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.