New York BPO firm Bisys has signed a definitive agreement to sell its information services group, which provides data processing, imaging and back office services to financial services firms, to Connecticut-based banking software vendor Open Solutions for $470 million in cash.
Bisys says it expects net proceeds after closing costs and taxes to be approximately $300 million.
Open Solutions says it expects the acquisition will add between $180 million to $195 million in revenue, between $45 million to $55 million of earnings before EBITDA and between six and 12 cents of diluted earnings per share in 2006.
The transaction is expected to close in the fourth quarter of 2005.
Bisys' information services business consists of its banking solutions unit which provides outsourced processing services to 220 large and community banks, its document solutions division which provides cheque-imaging services to around 400 financial institutions, and its corporate financial solutions unit which provides processing in the areas of asset retention, corporate banking, healthcare banking, and insured deposit services for more than 100 insurance companies and corporations.
Open Solutions, which provides software to mainly small and mid-sized banks and credit unions, says the acquisition will extend its client base to include the insurance and corporate industries.
The company will operate the information services business as a separate division and says it will keep the unit's offices in New Jersey, Texas, Illinois, Alabama, Massachusetts and Ohio.
Russ Fradin, Bisys president and CEO, says the disposal of the information services unit will allow the company to focus on investing in and expanding its investment services and insurance services businesses.