Misys plc to sell Misys General Insurance to Montagu Private Equity
Misys plc announces today (29 March 2006) that it has agreed to sell its general insurance broking systems business, Misys General Insurance (‘MGI’), to Montagu Private Equity Limited. The gross proceeds from the sale will be approximately £182 million and will be satisfied entirely in cash on completion. Completion is expected to take place within the next three months, subject to consent from the Financial Services Authority (FSA) to the change of control and other customary closing conditions. Misys intends to use the proceeds from this transaction initially to repay existing company debt.
Misys General Insurance is the leading supplier of IT solutions and products for the general insurance intermediary industry in the UK and the Republic of Ireland. Through Misys Insurance Management (‘MIM’), MGI also offers customers membership of a broker network that provides access to superior insurance schemes and preferential service levels from insurers.
“The general insurance business has been a strong contributor to Misys for over two decades of our growth and development,” said Kevin Lomax, Chief Executive, Misys plc. “It is the leader in its market and has consistently delivered high profit margins and strong cash flow. The Board has taken the decision to sell it because it is no longer central to our strategy, which is to focus on the expansion opportunities in our core markets of banking and healthcare. We are pleased that the management team, under the leadership of Phillip Bell, has found a strong and enthusiastic backer in Montagu Private Equity, and we wish them well for the future development of the business.”
Jason Gatenby, Director, Montagu Private Equity, said, “We are delighted to agree this transaction with Misys. MGI is a business which we have followed for some time. It has delivered excellent financial performance while staying at the forefront of its market. This is the kind of business, and management team, in which we like to invest. The business has good opportunities for growth as a standalone business and we are looking forward to working with Phillip Bell and his team to exploit them.”
Phillip Bell, Chief Executive of MGI, said, “While Misys has been a good corporate parent to this business in its first quarter century, we believe that there are avenues for future development which we will be better able to explore as an independent company. This transaction is good news for our customers, our insurance partners and our employees.”
Whilst MGI itself is not a regulated business, the business it carries out through MIM is regulated by the FSA. The sale of MGI is therefore subject to the FSA’s consent to the change of control. Closing is subject to receipt of this consent from the FSA, which is expected within the next three months. Closing is also subject to conditions typical for a transaction of this type.
As at 30 November 2005, MGI had gross assets of £8.8 million. In the year to 31 May 2005, MGI delivered pre-tax profit of £15.8 million from revenue of £33.7 million; in the six months to 30 November 2005, MGI’s operating profit was £7.3 million and its revenue was £16.0 million.
Lexicon Partners Limited acted as financial adviser to Misys in respect of this transaction.
About Misys General Insurance
Misys General Insurance was founded in 1979 by Kevin Lomax, Misys Chief Executive. It is the leading supplier of IT solutions to general insurance intermediaries in the UK and Republic of Ireland. It has over 1,800 customers and partners with the UK ’s leading insurance companies. It comprises Misys Financial Systems Limited, Misys Insurance Services (Ireland ) Limited, Misys Insurance Management Limited (MIM) and ACT Insurance Systems Limited. Through MIM it owns Countrywide, the largest intermediary network in the UK with 800 members. Misys General Insurance pioneered the development of electronic transaction processing in the UK general insurance market, and is today the leader in full cycle EDI (electronic data interchange) delivery. It is based in Worcester, England, and has over 300 employees.
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Josh RosenstockTel: +44 (0) 20 7368 2327
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Email: josh.rosenstock@misys.co.uk
Mob: +44 (0) 7921 910 914
Email: josh.rosenstock@misys.co.uk
About Misys plc
Misys plc (FTSE: MSY), the global software company, is one of the world’s largest and longest-established providers of industry-specific software. Founded in 1979, Misys serves the international banking and healthcare industries, combining technological expertise with in-depth understanding of customers’ markets and operational needs. In banking Misys is a market leader with over 1,200 customers, including 49 of the world’s top 50 banks. In healthcare Misys is also a market leader, serving more than 110,000 physicians in 18,000 practice locations, 1,200 hospitals and 600 home care providers. Through Sesame, a wholly-owned subsidiary, the company is also a leading provider of support services to about 7,800 financial advisers in the UK. Misys employs around 6,000 people who serve customers in more than 120 countries. For more information, visit www.misys.com
