MONETT, Mo., July 1 Jack Henry & Associates,Inc. (Nasdaq: JKHY), a leading provider of integrated technology solutions anddata processing services for financial institutions, today announced that itsinsurance agency outsourcing solution has been bought by the business line'smanagement team and a private equity group. Terms of the transaction were notdisclosed.
Banc Insurance Services, Inc. (BIS) was founded in 1999 to provide aturnkey outsourcing solution that enables financial institutions to own aninsurance agency without the capital investments required to build or buy anagency, or the inherent operational risks. BIS was acquired by Jack Henry &Associates in 2004 and was assimilated into its ProfitStars(R) brand in 2006.The company will now be re-branded as Insuritas, Inc. with its founder,Jeffrey Chesky, serving as president and CEO, and the existing employeesjoining the independent company.
Kevin Williams, CFO of Jack Henry & Associates, reported, "We have adisciplined acquisition strategy and establish revenue contribution and marginexpectations for every acquisition we make. Despite our best efforts, thisbusiness line did not generate the financial performance we expected. Wethoroughly evaluated our options and determined divesting this business linewas in the best interest of our company and our shareholders. Divesting thisbusiness line will generate a modest improvement in our margins and eliminatethe negative impact it had on cash flow. We also determined that selling thisbusiness line to its highly specialized management team is in the bestinterest of our joint clients because it will provide a consistent serviceexperience and ongoing access to quality insurance products. We haveestablished a strategic business alliance with Insuritas and will activelyrefer current and prospective customers interested in offering commercial andpersonal lines of insurance to them. We believe the opportunity to once againoperate as a private company focused exclusively on insurance distributionprovides the best near- and long-term outlook for this business."
According to Chesky, "As a part of Jack Henry & Associates, we were ableto upgrade our master agency platform and build a more technology-richinfrastructure. While we enjoyed great support within Jack Henry, we believeour business can grow more rapidly operating as an independent company. Weare excited about the opportunity to leverage our success and continuedesigning, implementing, and managing successful insurance agency aisles inthe stores of financial institutions nationwide."
Jack Henry & Associates' ProfitStars division encompasses the remaining 16acquisitions that were made to assemble more than 50 products and servicesthat improve the performance of financial institutions of all asset sizes andcharters, and diverse corporate entities. These solutions complementvirtually any core information processing platform and facilitate revenue andgrowth, risk mitigation and control, and cost control.
About Jack Henry & Associates, Inc.
Jack Henry & Associates, Inc. (Nasdaq: JKHY) is a leading provider ofcomputer systems and ATM/debit card/ACH transaction processing servicesprimarily for financial services organizations. Its technology solutionsserve more than 8,700 customers nationwide, and are marketed and supportedthrough three primary brands. Jack Henry Banking(TM) supports banks rangingfrom de novo to mid-tier institutions with information and transactionprocessing solutions. Symitar(TM) is the leading provider of information andtransaction processing solutions for credit unions of all sizes. ProfitStarsprovides highly specialized products and services that enable financialinstitutions of every asset size and charter, and diverse corporate entitiesto mitigate and control risks, optimize revenue and growth opportunities, andcontain costs. Additional inform