Citigroup and Private Equity to Acquire Bisys

ROSELAND, N.J. – Financial ailing Bisys Group, a provider of back-office services to credit unions, banks and insurers, said yesterday it has agreed to be acquired by Citigroup for $12 a share, or a total of $1.45 billion. Simultaneously, JC Flowers, a private equity fund in the process of acquiring Sallie Mae, will acquire Bisys’ Insurance Services Group and Retirement Services from Citigroup. Bisys, which provides mutual fund and insurance services, has been on the market since it reported a 36% decline in net income for its fiscal second quarter ended December 31. In October, Bisys agreed to pay shareholders $66 million to settle civil fraud claims over the misstatement of earnings, and in September the company agreed to pay $21 to the Securities and Exchange Commission to settle fraud charges that it made illegal kickbacks to brokers that were recommending its mutual funds to customers. JC Flowers is part of a group that includes bank giants Bank of America and JP Morgan Chase that has agreed to acquire student loan giant Sallie Mae for $25 billion.