Citigroup Inc said on Wednesday it agreed to buy financial services provider Bisys Group Inc for $1.45 billion to offer more services to hedge funds and private equity firms. The largest US bank would keep Roseland, New Jersey-based Bisys' fund services and alternative investment services units.
It will fold them into its global transaction services unit, which holds securities, processes stock and bond trades, and offers cash management services. Citigroup plans to sell Bisys' retirement and insurance services units to private equity firm J.C. Flowers & Co for about $645 million. Its net cost would thus be $800 million.
Bisys shareholders would receive $11.85 per share in cash, 3.3 percent more than Tuesday's closing price. They would also receive a 15 cent per share dividend payable by Bisys, netting an additional $18 million. The transaction would end Bisys' nearly nine-month review of strategic alternatives. Bisys employs about 5,000 people, divided roughly equally among units going to Citigroup and units going to Flowers, spokeswoman Amy Conti said.