PrimeVest Financial Services Inc., which operates as a broker for hire to small banks, could gain more than 100 banking clients once it acquires Bisys Brokerage Services.
PrimeVest, a St. Cloud, Minn., subsidiary of Reliastar Financial Corp. of Minneapolis, announced Tuesday that it would buy Bisys Brokerage, the third-party marketing arm of Little Falls, N.J.-based Bisys Group Inc. Terms of the cash transaction were not disclosed.
The Minnesota brokerage company, which has about 600 bank clients of its own, plans to integrate Bisys' 100-plus bank clients by mid-March, said president and chief executive officer Randall L. Ciccati. The companies' sales totaled about $6.3 billion in 1999. Because PrimeVest is self-clearing, the integration of Bisys' clients should be easier, Mr. Ciccati said. The deal is scheduled to close in early March.
In addition, PrimeVest said it expects to add 30 employees as a result of the deal, in operations, technology, field management, and sales support. These hirings would be in addition to the 37 new jobs already planned in those areas, Mr. Ciccati said.
Bisys' brokerage services division had been part of Corelink Resources Inc., which Bisys bought outright in July 1998, after taking a 49% stake in 1995.
Of course, PrimeVest executives must first persuade Bisys' clients to transfer their accounts to PrimeVest.
"When one third party is acquired by another third party, it's natural to review the account," said Kenneth Kehrer, an industry consultant in Princeton, N.J. Faced with a potentially disruptive change of platform, many banks take the opportunity to look at competing marketers, Mr. Kehrer said.
"On the surface it's a real positive," said Frank J. Bonetto, a senior executive vice president who oversees the investment program at Bank of the West, a San Francisco subsidiary of BancWest Corp. of Honolulu, which has worked with Bisys since April. "PrimeVest brings some technology not previously available with Bisys," including on-line account access, Internet trading, and on-line information for account representatives.
Becky C. Shelton, head of wealth management at Los Angeles-based Sanwa Bank California, which offers investment products through Bisys, agreed. "It will get us out of a lot of the paper and faxing we had to do with Bisys," she said.
Mr. Bonetto said his main regret is the timing. On Tuesday, BancWest announced the acquisition of 68 branches to be divested by Salt Lake City's First Security Corp. and Zions Bancorp, which are merging.
BancWest will have to take on the integration of the branches into its investment program just as it transfers its accounts to a new third-party provider.