Financial Management

CSI to be Acquired by Centerbridge and Bridgeport for $1.6 billion

CSI to be Acquired by Centerbridge and Bridgeport
Computer Services, Inc., a leading provider of end-to-end fintech and regtech solutions, announced today it has entered into a definitive agreement to be acquired by Centerbridge Partners, L.P. (Centerbridge), a global, multi-strategy private investment firm with deep experience investing in financial services and technology, and Bridgeport Partners (Bridgeport), a private investment firm with a long-term, value-oriented approach, in an all-cash transaction valued at approximately $1.6 billion, or $58.00 per share. The transaction follows a robust strategic review process and was unanimously approved by CSI’s board of directors.

Under the terms of the agreement, CSI shareholders will receive $58.00 per share in cash upon the closing of the transaction, which is expected to occur in the fourth quarter of calendar year 2022, subject to customary closing conditions, including CSI shareholder approval and regulatory review. The per-share purchase price represents a 53% premium to CSI’s closing stock price on Aug. 19, 2022, the last full trading day before the agreement was announced, and a premium of 54.4% over CSI’s 30-day volume-weighted average share price.

“After a thorough strategic review, the CSI board of directors is very pleased to announce this transaction and believes it is in the best interests of our shareholders, Upon completion of the transaction, CSI intends to continue operating under the leadership of CEO David Culbertson and the CSI leadership team, with its headquarters expected to remain in Paducah, Kentucky.”

- Steve Powless, CSI’s Chairman of the Board

Further, in connection with the transaction, all members of the CSI board of directors and Founder and Chairman Emeritus John A. Williams have entered into a voting and support agreement to vote in favor of the transaction. Mr. Williams commented, “Having formed CSI nearly six decades ago, I am pleased to support this transaction as it will provide shareholders with immediate cash at a compelling value premium. In addition, I believe that our customers, employees and communities can rest assured that—based on their history—current management, Centerbridge and Bridgeport will continue CSI’s legacy.”

CSI’s long history of delivering end-to-end, market-leading solutions includes serving nearly 2,600 customers in the U.S. and in 30 other countries while pioneering innovative technology advancements.

For more than 57 years, CSI has been known as a leader in innovation and customer service. Centerbridge and Bridgeport have deep experience in technology and financial services as owners and operators. Working together after the closing, CSI intends to execute our strategic plans to expand and diversify our product offerings, transform our technology to leverage the scale and resiliency of the public cloud, and deploy optimized fintech and regtech solutions through our open banking and banking-as-a-service initiatives,” said David Culbertson, CSI’s President and CEO.

In working with Centerbridge and Bridgeport, CSI plans to carry on its tradition of excellence and continue to invest in its product roadmap to bring more solutions to market faster.

Supporting high-quality companies is central to our strategy at Centerbridge, and we have a deep track record of doing so in both financial services and technology. We are excited to work with CSI, as we share a like-minded commitment to innovation for customers and satisfaction for employees, CSI has a long, distinguished history in Paducah, Kentucky, as well as other local communities across the nation. We plan to continue our commitment and investment in these communities to further foster the CSI legacy,said Jared Hendricks, Senior Managing Director at Centerbridge and Ben Jaffe, Managing Director at Centerbridge.

Centerbridge and Bridgeport bring years of experience driving growth and value for businesses across a variety of industries.

I am pleased to have this opportunity to partner with Centerbridge on the acquisition of CSI, a company that I have followed closely for decades and have respected as a real leader in financial services and technology, CSI has always been known for its commitment to its customers, employees, partners and the communities it serves—a reputation that Centerbridge and Bridgeport are committed to maintaining while we work together with David and his team to implement the company’s growth initiatives, said Frank Martire, Bridgeport’s Founder.

Transaction Details
Closing of the transaction is subject to customary conditions, including approval by CSI’s shareholders and the receipt of regulatory approvals. Upon completion of the transaction, CSI will become a privately held company, and its common stock will no longer be listed on any public market.

Raymond James & Associates, Inc. and Moelis & Company LLC are acting as co-financial advisors to CSI, and Nelson Mullins Riley & Scarborough LLP is acting as its legal counsel. Goldman Sachs & Co. LLC and Jefferies LLC are acting as financial advisors to Centerbridge and Bridgeport. Kirkland & Ellis LLP is serving as legal counsel to Centerbridge. Aviditi Financial, LLC is serving as a capital markets advisor to Bridgeport. Weil, Gotshal and Manges LLP is serving as legal counsel to Bridgeport.

About the Proposed Transaction
A copy of the merger agreement and a presentation related to the proposed transaction will be posted on the Investor Relations section of CSI’s website at https://www.csiweb.com/who-we-are/investor-relations. The description of the merger agreement in this press release does not purport to be complete and is qualified in its entirety by reference to the full text of the merger agreement.

About CSI
Computer Services, Inc. (CSI) delivers core processing, digital banking, managed cybersecurity, cybersecurity compliance, payments processing, print and electronic document distribution, and regulatory compliance solutions to financial institutions and corporate customers, both foreign and domestic. Management believes exceptional service, dynamic solutions and superior results are the foundation of CSI’s reputation and have resulted in the company’s inclusion in such top industry-wide rankings as IDC Financial Insights FinTech 100, Talkin’ Cloud 100 and MSPmentor Top 501 Global Managed Service Providers lists. CSI has also been recognized by Aite-Novarica Group, a leading industry research firm, as providing the “best user experience” in its AIM Evaluation: The Leading Providers of U.S. Core Banking Systems.

About Centerbridge
Centerbridge Partners, L.P. is a private investment management firm employing a flexible approach across investment disciplines—private equity, private credit and real estate—in an effort to develop the most attractive opportunities for our investors. The firm was founded in 2005 and, as of June 30, 2022, has approximately $34 billion in capital under management with offices in New York and London. Centerbridge is dedicated to partnering with world-class management teams across targeted industry sectors and geographies.

About Bridgeport
Bridgeport Partners is a private investment firm with a long-term, value-oriented approach to investing. Bridgeport invests proprietary capital and partners with strategic sources of capital with a long-term orientation to support management teams and companies through industry and economic cycles. The firm, founded by Frank Martire, is led by seasoned operators and investors with decades of experience successfully building and leading companies in the public and private markets.

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