Misys to acquire Sophis, a leading capital markets software vendor

12 November 2010

Misys to acquire capital markets software vendor Sophis for €435m (£375m) enterprise value
Acquisition financed by sale of Allscripts shares, new credit facilities and issue of convertible bond
£670m tender offer to Misys shareholders launched with a 270-310p price range


Sophis, a global vendor of capital markets software solutions, to be acquired for an equity value of €273m (£235m). Sophis had net debt of €162m (£140m) at 30 September 2010, giving an enterprise value of €435m (£375m). A further €5m (£4m) may be payable on closing, subject to Sophis performance.

The acquisition establishes Misys as the number 1 application software and services provider in capital markets. Sophis’s buy-side solutions are very complementary to Misys’s sell-side strengths.

Sophis is highly profitable, with revenue of €74m and operating profit before interest and tax of €30m in the year ended 31 December 2009. Sophis’s high operating margin and low tax rate will significantly increase Misys’s profitability, bringing significant accretion to adjusted earnings per share in the first full financial year after acquisition (the year to 31 May 2012).

Financed through a sale of part of Misys’s remaining Allscripts shareholding, new increased credit facilities and a new convertible bond.
Acquisition subject to Misys shareholder approval - completion expected before the end of February 2011.

Separately, tender offer terms announced today for the return to Misys shareholders of £670m of proceeds from Misys’s sale, in August, of Allscripts shares, with a price range of 270-310p per Misys share. Further details are in a separate announcement.

Mike Lawrie, Misys Chief Executive, comments ‘I am delighted to announce this significant acquisition that progresses Misys further in the Leadership phase of its transformation. Today we are creating the leading application software and services provider in capital markets.
Sophis’s solutions are highly complementary to our existing treasury and capital markets solutions. We are delighted with the strength of the Sophis management team that will be joining us.

Sophis has considerable financial strength and will be significantly accretive to our earnings per share in our next financial year, to 31 May 2012. In addition, today we announced the launch of a return of £670m to our shareholders.’

Throughout this release an exchange rate of: £1:1.16€ is used translate transaction and balance sheet values.

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