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Misys Agrees For GBP 1.3 Bln Offer By PE Firm Vista

Misys Agrees For GBP 1.3 Bln Offer By PE Firm Vista
3/19/2012 4:24 AM ET

Banking software maker Misys Plc (MSY.L, MUSJF.PK) said Monday it has agreed to be acquired by an investment vehicle owned by US-based private equity firm Vista Equity Partners for 350 pence per share, totaling about 1.3 billion pounds ($2.1 billion).

Misys had several suitors, including a joint bid from CVC Capital Partners Ltd. and ValueAct Capital, the largest shareholder in Misys. The company's talks with Switzerland-based rival Temenos Group AG ended last week as the parties couldn't agree on the final terms of a transaction.

The current offer price represents a premium of 7.5 per cent to the closing price of its shares on February 2, the last business day prior to the announcement of discussions between Misys and Temenos regarding a possible combination.

An independent committee of Misys directors has unanimously agreed to recommend that Misys shareholders vote in favor of the deal. So far, irrevocable undertakings in respect of 73.09 million shares, representing about 21.9 percent, have been received to vote in favor of the deal.

Established in 1979, Misys has presence in Europe, the US, Asia, the Middle East and Africa. It serves over 1,300 customers, including all of the world's top 50 banks. Its solutions enable customers to cut costs, manage risk, meet regulatory requirements and realize competitive advantages.

Commenting on the deal, Robert Smith, Chairman and CEO of Vista Equity Partners, said, "...we believe that Misys has an attractive future that we plan to invest in and grow. With the combination of Misys and Turaz, one of our existing portfolio companies, we are creating the global leader in core banking, treasury management, capital markets and enterprise risk management software headquartered in the global banking centre, London."

The combined business of Misys and Turaz will remain headquartered in the UK. The combination is expected to have benefits of scale, opportunities to cross-sell products and ultimately significant opportunities to enhance growth.

Misys said Vista recognizes the skills and experience of its existing management and employees and expects the management of Misys to play a leading role in the new structure.

Vista has also given assurance that the existing employment rights will be fully safeguarded on completion of the acquisition. No headcount reduction is expected at Misys before the completion of the acquisition.

The consideration will be funded through a mixture of equity financing provided by the Vista Funds and debt funding from third party providers of debt finance to the investment vehicle, Magic Bidco Group. The acquisition will be implemented by means of a court-sanctioned scheme of arrangement.

Misys also reported a 12 percent drop in its third-quarter revenues and an 18 percent decline in its order intake. Misys Sophis saw a 12 percent drop in revenue, but order intake advanced 16 percent. Both order intake and revenue declined in the banking and TCM businesses.

Misys Acting Chief Executive Tom Kilroy said, "Our third quarter results were impacted predominantly by the cautious approach adopted by customers whilst discussions were taking place about the future ownership of Misys, and also by continued challenging conditions in financial markets. However, we are confident that sales are being delayed rather than cancelled."

MSY.L closed on Friday at 325.18 pence, up 2.68 pence, on a volume of 2.65 million shares.

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by RTT Staff Writer

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