Ascensus, which failed to get sold two years ago, is paying out a $100 million dividend to its owners, which include J.C. Flowers & Co.
Dresher, Pa.-based Ascensus is boosting debt by roughly $100 million to fund the payout, Thomson Reuters Loan Pricing Corp. said.
In 2012, J.C. Flowers put Ascensus up for sale but the process was pulled after strategics failed to bid. Ascensus provides retirement plan services, like record keeping and administration, for businesses. The company is expected to produce more than $280 million in revenues in 2015, Moody’s Investors Service said in Jan. 8 report.
J.C. Flowers’s ownership of Ascensus dates back to 2007 when the company was known as Bisys. In 2007, Citi acquired Bisys, a financial services outsourcing firm, for $1.45 billion in cash. As part of the deal, Citi agreed to sell the insurance and retirement services divisions to J.C. Flowers in a move that reduced the transaction price to $800 million. The Bisys Retirement unit operated as a unit of Crump Group, which was a J.C. Flowers portfolio company. In late 2007, Bisys Retirement Services changed its name to Ascensus, which means “moving upward” in Latin.
In April, J.C. Flowers completed its sale of Crump’s life and property and casualty insurance operating divisions to BB&T Corp. for $570 million. Ascensus wasn’t part of the sale.
News of the Ascensus dividend comes as J.C. Flowers has reportedly registered with FINRA as a broker dealer to advise on M&A deals. J.C. Flowers Securities Co. LLC can work on investment advisory services and private placements, the Wall Street Journal said. James Christopher Flowers owns 75 percent of the firm, the story said.
J. Christopher Flowers, the former Goldman Sachs executive who was once hailed as a giant of investment banking, founded New York-based J.C. Flowers.
Flowers is known for his takeover of Long-Term Credit Bank of Japan (now called Shinsei Bank) in 2000, an acquisition that is considered to be one of the most profitable PE deals ever. Flowers’ fortunes, however, have turned. The firm invested in MF Global, the futures broker that went bankrupt in late 2011. J.C. Flowers losses due to MF Global were expected, in 2011, to amount to about $48 million, peHUB reported. Last year, David Schamis, an MD with Flowers and a member of the firm’s operating committee, left to join Atlas Merchant Capital.
It’s unclear when J.C. Flowers, which invests in financial services, will be fundraising again. The firm’s last fund, J.C. Flowers III LP, collected $2.3 billion in 2009 while its second fund closed at $7 billion in 2006.
Fund II is generating a negative 13.9 percent IRR and total value multiple of 0.44x as of June 30, performance data from the Oregon Public Employees Retirement Fund said. The third pool is performing better. Flowers III is producing a a 20.4 percent IRR since inception, the Ventura County Community Foundation said in a Sept. 30, 2013 memo.
Ascensus and Flowers couldn’t be reached for comment.
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