Glastonbury, Connecticut – (The Hosting News) – October 18, 2006 – Web host and integrated enabling financial technologies firm, Open Solutions Inc., will be acquired by The Carlyle Group and Providence Equity Partners, in a transaction valued at over $1.3 billion. Open Solutions is a provider of integrated enabling technologies for financial institutions in the United States, Canada and other international markets.
The acquisition will be financed through a combination of equity contributed by investment funds affiliated with The Carlyle Group and Providence Equity Partners and debt financing provided by affiliates of Wachovia, JPMorgan, and Merrill Lynch and Co. Under terms of the agreement, The Carlyle Group and Providence Equity Partners will acquire all of Open Solutions outstanding shares of common stock. Open Solutions stockholders will receive $38.00 in cash for each share of Open Solutions common stock, representing an approximately 32 percent premium over the average closing price of Open Solutions stock for the last thirty trading days. The enterprise value of the transaction, including assumption of debt, is more than $1.3 billion. As a result of this acquisition, Open Solutions’ convertible notes will become convertible into the merger consideration payable to their underlying shares of common stock and Open Solutions other currently outstanding indebtedness will be retired.
Louis Hernandez, Jr., Chairman and CEO of Open Solutions explained, ” This is yet another exciting chapter for Open Solutions as we continue our efforts to revolutionize the financial services sector. With this announced transaction we fulfill our desire to deliver an excellent value for our stockholders and at the same time ready Open Solutions to enter the next stage in our history of continually striving to provide innovative and enabling technology solutions and services to our clients and the marketplace. We are pleased to be partnering with two industry leading firms in The Carlyle Group and Providence Equity Partners, and we look forward to working with them to further serve our clients and the industry and build on the success of our company.”
Bud Watts, Managing Director of The Carlyle Group added, ”Louis Hernandez and the talented employees of Open Solutions have built a remarkable company with best-in-class technology and an impressive client list. Both Providence and Carlyle bring substantial financial resources to Open Solutions, and in partnership with Louis and his team, we intend to support the continued growth and expansion of Open Solutions with aggressive investment in internal R and D, customer service, and complementary acquisitions.”
Julie Richardson, Managing Director at Providence Equity Partners offered, ” Since its founding in 1992, Open Solutions has utilized its unique, best-in-class core processing technology to become a premier provider of information services to the financial community. We look forward to partnering with Louis and his team and The Carlyle Group to support Open Solutions’ growth as a private company and the expansion of its leadership as a critical technology provider to the financial services industry.”
Open Solutions’ board of directors and a special committee of the board comprised solely of disinterested directors have unanimously approved the transaction and recommended to Open Solutions stockholders that they adopt the merger agreement and approve the merger. The transaction is expected to be completed during the first quarter of 2007 and is subject to various conditions, including approval by the stockholders of Open Solutions, the expiration of the applicable waiting period under the Hart-Scott-Rodino Act, the absence of the occurrence of a material adverse effect on Open Solutions and other customary closing conditions. The transaction is not subject to a financing condition. A special meeting of Open Solutions stockholders will be scheduled as soon as practicable following the preparation and filing of definitive proxy materials with the Securities and Exchange Commission.
Wachovia Securities acted as financial advisor to Open Solutions. Simpson, Thacher; Bartlett LLP acted as legal advisor to Open Solutions. SunTrust Robinson Humphrey acted as financial advisor to the special committee of the board of directors of Open Solutions and provided the committee with a fairness opinion in connection with the transaction. Morris, Nichols, Arsht and Tunnell LLP acted as legal advisor to the special committee of the board of directors of Open Solutions. Merrill Lynch and Co. acted as financial advisor to The Carlyle Group and Providence Equity Partners. Latham and Watkins LLP and Weil, Gotshal and Manges LLP acted as legal advisors to The Carlyle Group and Providence Equity Partners.
The Carlyle Group is a global private equity firm with $44.3 billion under management. Carlyle invests in buyouts, venture and growth capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace defense, automotive and transportation, business services, consumer and retail, energy and power, healthcare, industrial, technology and telecommunications and media. Since 1987, the firm has invested $22.4 billion of equity in 528 transactions for a total purchase price of $94.6 billion. The Carlyle Group employs more than 670 people in 16 countries. In the aggregate, Carlyle portfolio companies have more than $68 billion in revenue and employ more than 300,000 people around the world.
Providence Equity Partners Inc. is a global private investment firm specializing in equity investments in media and entertainment, communications and information companies around the world. The principals of Providence Equity manage funds with over $9 billion in equity commitments and have invested in more than 80 companies operating in over 20 countries since the firm’s inception in 1990. Significant investments include Bresnan Broadband Holdings, Casema, Comhem, Education Management Corporation, eircom, Kabel Deutschland, Metro-Goldwyn-Mayer, Ono, PanAmSat, ProSiebenSat.1, Recoletos, SunGard, VoiceStream Wireless, Warner Music Group, and Western Wireless. Providence Equity is headquartered in Providence, RI and has offices in New York and London.
The Open Solutions CFS division provides outsourced information processing in the area of asset retention, corporate banking, healthcare banking and insured deposit services for banks, insurance companies and major corporations. Open Solutions has developed a comprehensive and flexible suite of technology and services to enable HSA service delivery for all the participants in the healthcare market from the individual consumer and employer to third party administrators, banks and investment brokers. Our proven solution provides a compliant, secure set of services that enables the full range of HSA activities from enrolment and contribution, to payments, account management and investment.
To learn more about The Carlyle Group, please visit: www.carlyle.com.
For more information about Open Solutions, please visit: www.opensolutions.com.