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

Computer Services, Inc. (CSI) (OTCQX: CSVI), 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,” said Steve Powless, CSI’s Chairman of the Board. “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.”

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,” said Jared Hendricks, Senior Managing Director at Centerbridge and Ben Jaffe, Managing Director at Centerbridge. “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.”

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,” said Frank Martire, Bridgeport’s Founder. “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.”

For more information about CSI, visit csiweb.com.

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. For more information, visit csiweb.com.

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. For more information, please visit centerbridge.com.

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. For more information, please visit bgptpartners.com.

Cautionary Notice Regarding Forward-Looking Statements

Statements included in this press release that are not historical in nature are intended to be, and hereby are identified as, forward-looking statements and should be evaluated as such. Examples of forward-looking statements include, but are not limited to, statements regarding the outlook and expectations of CSI, Centerbridge and Bridgeport with respect to the proposed transaction, the strategic benefits of the transaction and the timing of the closing of the transaction. Words such as “will,” “intend,” “well positioned,” “continue,” “may,” “anticipate,” “plan,” “estimate,” “expect,” “should,” “could” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, among others, the following:

• the risk that the proposed transaction may not be completed in a timely manner or at all, which may adversely affect CSI’s business and the price of CSI’s common stock;
• the failure to satisfy any of the conditions to the consummation of the proposed transaction, including obtaining the requisite regulatory, governmental and CSI shareholder approvals;
• the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;
• the possibility that the anticipated financing for the transaction is not received;
• the outcome of any legal proceedings that may be instituted related to the proposed transaction;
• any disruption from the proposed transaction, making it more difficult for CSI to maintain relationships with its customers or employees;
• the diversion of CSI’s management time on transaction-related issues;
• the failure to promptly and effectively integrate CSI’s business;
• unexpected costs, liabilities or delays related to the proposed transaction; and
• other factors that may affect future results of CSI, including adverse impacts from economic, competitive, technological and governmental factors affecting CSI’s operations, customers, markets, services, products and prices, CSI’s ability to prevent a material breach of security of any of its systems, the impact of new or changes in current laws, regulations or other industry standards regarding the privacy of consumer data and the adverse effects of events beyond CSI’s control, such as epidemics and pandemics, war or terrorist activities, essential utility outages and deterioration in the U.S. and global economy.

These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in CSI’s business. Additional information regarding other factors that may affect CSI’s operations is set forth in CSI’s Annual Report (including Supplemental Information), Quarterly Reports, Information and Disclosure Statements, News Releases and other documents posted from time to time on the OTCQX website at https://www.otcmarkets.com/stock/CSVI/disclosure. CSI disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where To Find It

This press release contains only a brief description of the proposed merger transaction.

It is not a request for, or a solicitation of, any vote or proxy with respect to the proposed transaction and does not constitute an offer to buy or sell, or the solicitation of an offer to sell or buy any securities. In connection with the proposed transaction, CSI will hold a special meeting in the fourth quarter of calendar year 2022 to seek shareholder approval and will mail a definitive proxy statement to its shareholders that will contain important information about the proposed transaction and related matters (the “Proxy Statement”). SHAREHOLDERS OF CSI ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER DOCUMENTS TO BE FILED WITH THE OTCQX IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of these documents (when they are available) and other related documents filed with the OTCQX at the OTCQX’s website at https://www.otcmarkets.com/stock/CSVI/disclosure and the Investor Relations section of CSI’s website at https://www.csiweb.com/who-we-are/investor-relations/. In addition, the Proxy Statement and other documents may be obtained free of charge by directing a request to CSI, Corporate Secretary, at 3901 Technology Drive, Paducah, Kentucky 42001, by calling 800-545-4274 ext. 10146 or by sending an email to [email protected]. 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, a copy of which will be posted on the Investor Relations section of CSI's website at https://www.csiweb.com/who-we-are/investor-relations/.

Participants in the Solicitation

CSI and its directors and executive officers may be considered to be participants in the solicitation of proxies from CSI’s shareholders in connection with the proposed transaction. Information regarding CSI’s directors and executive officers can be found in CSI’s Annual Report, and Supplemental Information, for 2022, each published by the OTCQX on May 17, 2022. Additional information regarding the interests of CSI’s directors and executive officers in the proposed transaction will be included in the Proxy Statement described above. These documents are available free of charge at the OTCQX’s website and from CSI’s website as described above.

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