| October
16, 2006
FOR IMMEDIATE RELEASE
Open Solutions Inc. Announces Agreement
To Be Acquired By The Carlyle Group
and Providence Equity Partners
Open Solutions Stockholders to receive
$38.00 per Share; Transaction Valued
at over $1.3 Billion -- GLASTONBURY,
Conn., Oct. 16, 2006 – Open
Solutions Inc.® (NASDAQ:OPEN),
The Carlyle Group and Providence Equity
Partners jointly announced today that
they have signed a definitive agreement
under which The Carlyle Group and
Providence Equity Partners will acquire
Open Solutions 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.
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.
“This is yet another exciting
chapter for Open Solutions as we continue
our efforts to revolutionize the financial
services sector”, said Louis
Hernandez, Jr., Open Solutions Chairman
and CEO. “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, stated, “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&D, customer service,
and complementary acquisitions.”
“
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,”
said Julie Richardson, Managing Director
at Providence Equity Partners. “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.
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 & Co.
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 & Tunnell LLP acted as legal
advisor to the special committee of
the board of directors of Open Solutions.
Merrill Lynch & Co. acted as financial
advisor to The Carlyle Group and Providence
Equity Partners. Latham & Watkins
LLP and Weil, Gotshal & Manges
LLP acted as legal advisors to The
Carlyle Group and Providence Equity
Partners.
About The Carlyle Group
The Carlyle Group is a global private
equity firm with $44.3 billion under
management. Carlyle invests in buyouts,
venture & growth capital, real
estate and leveraged finance in Asia,
Europe and North America, focusing
on aerospace & defense, automotive
& transportation, business services,
consumer & retail, energy &
power, healthcare, industrial, technology
and telecommunications & 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. www.carlyle.com.
About Providence Equity Partners
Inc.
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.
About Open Solutions Inc.
Open Solutions Inc. offers a fully
featured strategic product platform
that integrates core data processing
applications built on a single centralized
Oracle relational database, with Internet
banking, cash management, CRM/business
intelligence, financial accounting
tools, imaging, digital documents,
Check 21, interactive voice response,
network services, Web hosting and
design, and payment and loan origination
solutions. Open Solutions’ full
suite of products and services allows
banks, thrifts, credit unions and
financial services providers in the
United States and Canada to better
compete in today’s aggressive
financial services marketplace, and
expand and tap their trusted financial
relationships, client affinity, community
presence and personalized service.
For more information about Open
Solutions or its financial product
line, contact Mickey Goldwasser by
email at mgoldwasser@opensolutions.com
by phone at 860.652.3153 or via fax
at 860.652.3156. Visit Open Solutions’
Internet site at www.opensolutions.com.
Open Solutions Inc. is a registered
trademark of Open Solutions Inc. All
other company and product names may
be trademarks of their respective
owners. Copyright 2006 Open Solutions
Inc. All rights reserved.
Safe Harbor Statement
Statements made in this press release
that state Open Solutions Inc.'s or
management's intentions, beliefs,
expectations, or predictions for the
future are forward-looking statements
within the meaning of The Private
Securities Litigation Reform Act of
1995. Readers are cautioned that these
statements are only predictions and
may differ materially from actual
future events or results. All forward
lookingstatements are only as of the
date of this press release and Open
Solutions Inc. undertakes no obligation
to update or revise them. Such forward-looking
statements are subject to a number
of risks, assumptions and uncertainties
that could cause Open Solutions Inc.'s
actual results to differ materially
from those projected in such forward-looking
statements. For example, we have entered
into and may continue to enter into
or seek to enter into business combinations
and acquisitions which may be difficult
to integrate, disrupt our business,
dilute stockholder value or divert
management attention. Factors which
could cause our actual results to
differ materially from those projected
in forward-looking statements include,
without limitation, economic, competitive,
governmental and technological factors
affecting the banking and credit union
industry and/or Open Solutions Inc.'s
operations, markets, products, services,
prices and other factors set forth
under the heading "Factors Affecting
Future Operating Results" in
Open Solutions' Quarterly Report on
Form 10-Q for the three months ended
June 30, 2006, as filed with the Securities
and Exchange Commission.
IMPORTANT INFORMATION WILL BE FILED
WITH THE SEC
In connection with the proposed merger,
Open Solutions Inc. will file a proxy
statement with the Securities and
Exchange Commission. INVESTORS AND
SECURITY HOLDERS ARE ADVISED TO READ
THE PROXY STATEMENT WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and
security holders may obtain a free
copy of the proxy statement (when
available) and other documents filed
by Open Solutions Inc. at the Securities
and Exchange Commission's web site
at http://www.sec.gov.
The proxy statement and such other
documents may be obtained for free
from Open Solutions by directing such
request to Open Solutions Inc., Corporate
Secretary, 455 Winding Brook Drive,
Glastonbury, CT 06033, telephone:
(860) 652-3155. Open Solutions Inc.
and its directors, executive officers
and other members of its management
and employees may be deemed to be
participants in the solicitation of
proxies from its stockholders in connection
with the proposed merger. Information
concerning the interests of Open Solutions'
participants in the solicitation,
which may be different than those
of Open Solutions stockholders generally,
is set forth in Open Solutions' proxy
statements and Annual Reports on Form
10-K, previously filed with the Securities
and Exchange Commission, and in the
proxy statement relating to the merger
when it becomes available.
Editors Note: The
correct usage of the company name,
Open Solutions Inc., is either referring
to it as Open Solutions Inc. or Open
Solutions. Open Solutions no longer
uses the acronym of OSI to refer to
the company.
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