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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 15, 2005
OPEN SOLUTIONS INC.
(Exact name of registrant as specified in its charter)
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| Delaware
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000-02333-56
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22-3173050 |
(State or Other Jurisdiction
of Incorporation)
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(Commission File
Number)
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(IRS Employer
Identification No.) |
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| 455 Winding Brook Drive Glastonbury, CT
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06033 |
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(Zip Code) |
Registrant’s telephone number, including area code: (860) 652-3155
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Open Solutions Inc. (the “Company”) has entered into a Stock Purchase Agreement, dated as of
September 15, 2005 (the “Purchase Agreement”), by and among Open Solutions Inc., Husky Acquisition
Corporation, a wholly-owned subsidiary of the Company (“Purchaser”), The BISYS Group, Inc.
(“BISYS”) and BISYS Inc. (“Seller”). The Purchase Agreement contemplates that Purchaser will
purchase all of the outstanding shares of common stock, no par value per share, of BIS LP Inc., a
wholly-owned subsidiary of Seller (“BIS”), for $470 million in cash (the “Transaction”), subject to
adjustment based on the difference between targeted working capital and the working capital of BIS
and its subsidiaries at the closing of the Transaction. In addition, the purchase price will be
reduced based upon the average actual and projected change in earnings before interest, taxes,
depreciation and amortization of BIS and its subsidiaries for the twelve-month periods ended June
30, 2003, June 30, 2004, June 30, 2005, June 30, 2006 and June 30, 2007 (the “Average Change in
EBITDA”) that is a result of BISYS’s restatement of its historical financial statements. If the
Average Change in EBITDA is a negative number greater than ($500,000), then the purchase price will
be reduced by the amount of the Average Change in EBITDA, expressed as a positive number,
multiplied by a factor of 8, with a maximum adjustment of $15 million.
The closing of the Transaction is subject to the satisfaction or waiver of various closing
conditions, including but not limited to the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the availability
of the financing described below on substantially the terms and conditions set forth in the
Company’s commitment letters, the receipt of consolidated audited financial statements of BIS and
its subsidiaries that do not reflect a material change in the consolidated financial position,
results of operations or changes in financial position of BIS and its subsidiaries from that
reflected in the financial statements Seller represents and warrants to in the Purchase Agreement,
the execution by certain individuals of employment agreements in form and substance reasonably
satisfactory to Purchaser, the receipt of evidence that certain guarantees made by certain
subsidiaries of BIS have been terminated and the receipt of certain third party consents and
approvals. BISYS, Seller, Purchaser and the Company have made customary representations and
warranties and covenants in the Purchase Agreement.
The Company expects to finance the Transaction with a combination of available cash and
borrowings under new credit facilities of the Company pursuant to commitment letters entered into
as of September 15, 2005 with Wachovia Bank, National Association and Wachovia Capital Markets,
LLC. Such financing will consist of $320 million of senior secured first lien credit facilities,
consisting of a $30 million revolving credit facility (none of which is expected to be drawn at
closing) and a $290 million term loan facility, and a $60 million senior secured second lien term
loan facility. These financing commitments are subject to the completion of the Transaction and
customary closing conditions, including entering into definitive loan agreements.
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wachovia Securities LLC, Simpson Thacher &
Bartlett LLP and Shipman & Goodwin LLP have advised the Company in connection with the Transaction.
The Purchase Agreement also contains certain customary termination rights, including but not
limited to the right of any party to terminate the Purchase Agreement if the Transaction is not
completed by December 31, 2005 and the right of Purchaser to terminate the Purchase Agreement if
there is a material adverse effect with respect to BIS or if exceptions to certain warranties
regarding contract terminations and non-renewals and employee departures occur between signing and
closing. In addition, Purchaser may terminate the Purchase Agreement if the restatement adjustment
would be greater than $15 million or if the closing condition pertaining to the delivery of audited
BISYS financial statements is not met. BISYS must promptly reimburse Purchaser for up to $2.75
million of its reasonable out-of-pocket costs if the Purchase Agreement is terminated by Purchaser
for either reason set forth in the preceding sentence and for up to $2.0 million of its reasonable
out-of-pocket costs if the Purchase Agreement is terminated by the Purchaser because of the
occurrence of the exceptions to warranties referred to in the second preceding sentence.
The foregoing description of the Purchase Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed
as Exhibit 2.1 hereto, and is incorporated herein by reference.
The Purchase Agreement contains representations and warranties of BISYS, Seller, Purchaser and
the Company that they have made to each other. The assertions embodied in those representations
and warranties were made solely for purposes of the contract among BISYS, Seller, Purchaser and the
Company and may be subject to important qualifications and limitations agreed by and among them in
connection with negotiating the terms of the Purchase Agreement. Moreover, certain representations
and warranties may not be accurate or complete as of any specified date, because, among other
reasons, they are subject to a contractual standard of materiality different from those generally
applicable to stockholders or were used for the purpose of allocating risk among the parties
thereto rather than establishing matters as facts. For the foregoing reasons, no person should
rely on these representations and warranties as statements of factual information in the Purchase
Agreement.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
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2.1
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Stock Purchase Agreement, dated as of September 15, 2005, by
and among Open Solutions Inc., Husky Acquisition Corporation, The BISYS Group,
Inc. and BISYS Inc. |
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99.1
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Press Release issued by the Company on September 15, 2005 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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| Dated: September 19, 2005 |
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OPEN SOLUTIONS INC. |
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By:
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/s/ Carl D. Blandino |
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Carl D. Blandino |
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Senior Vice President, Chief Financial Officer and Treasurer |
EXHIBIT INDEX
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| Exhibit No. |
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Description |
2.1
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Stock Purchase Agreement, dated as of September 15, 2005, by and among Open Solutions
Inc., Husky Acquisition Corporation, The BISYS Group, Inc. and BISYS Inc. |
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99.1
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Press Release issued by the Company on September 15, 2005 |