REG-Misys PLC <MSY.L> Proposed Merger
Released: 18/03/2008
RNS Number:3244Q
Misys PLC
18 March 2008
18 March 2008
Not for release, publication, or distribution in whole or in part in or into
United States, Canada, Australia or Japan.
FOR IMMEDIATE RELEASE
MISYS PLC AND ALLSCRIPTS INC TO CREATE A LEADER IN PHYSICIANS SOLUTIONS
London, (March 18, 2008) - Misys (FTSE: MSY), and Allscripts, (NASDAQ: MDRX),
today announce the proposed merger of Misys Healthcare with Allscripts to form
Allscripts-Misys Healthcare Solutions Inc. ("Allscripts-Misys") and create a
leader in the provision of clinical software and services for the US ambulatory
healthcare market.
Transaction Highlights
- The combination of Allscripts-Misys will:
o establish a leader in the US Electronic Health Record (EHR) market which
is expected to be worth US$5 billion by 2015
o combine Misys Healthcare's strength in Practice Management (PM) and
Allscripts' strength in Electronic Health Records (EHR) creating a single
company to serve more effectively the combined customer base of
approximately 150,000 physicians in the United States in the provision
of clinical software and services which will empower physicians to deliver
healthcare more safely, efficiently and effectively
o offer a broader suite of highly rated products, solutions and services
for all segments of the ambulatory healthcare market
o continue to support and maintain all the existing products from both
companies, whilst offering customers access to an enhanced portfolio
o position Allscripts-Misys to capitalise on the rapid transformation of
the US healthcare industry, capturing the convergence of technology and
healthcare
- Misys and Allscripts expect Allscripts-Misys to achieve annual pre-tax cost
synergies of up to $25 million to $30 million within the next three years,
and revenue synergies from cross-selling into each other's respective client
bases
- The transaction is expected to be earnings accretive before amortisation of
acquired intangibles, exceptional costs and purchase accounting adjustments
for Misys in the first full financial year post completion, taking into
account expected synergies
- This transformational deal will accelerate the execution of Misys' growth
strategy outlined in March 2007
Transaction Summary
- Misys will combine Misys Healthcare with Allscripts to create Allscripts-Misys
Healthcare Solutions Inc., which will be listed on NASDAQ
- As part of the merger, Misys will contribute $330 million in cash and hold a
controlling stake of 54.5% in Allscripts-Misys, calculated on a fully diluted
basis. $330 million in cash also will be distributed to Allscripts' existing
shareholders on a pro-rata basis as a special dividend
- The cash element will be financed by Misys through new banking facilities and
a placing of new Misys shares underwritten by ValueAct Capital, Misys' largest
shareholder (see separate press release for further details)
- ValueAct Capital has committed to vote in favour of the Transaction at the
Misys shareholders' meeting to be convened to approve the Transaction
- Misys will continue to own 100% of its existing Banking and Treasury & Capital
Markets divisions and will continue to be listed on the London Stock Exchange
- Misys expects to declare a final dividend in respect of the year ending
31 May 2008. Following the closing of the Transaction, the Misys Board intends
to alter its dividend policy in order to invest cash flow in its operations.
Misys does not intend to pay a dividend going forward but will keep this
dividend policy under regular review
- Mike Lawrie will become Executive Chairman of Allscripts-Misys and retain his
role as CEO of Misys and Glen Tullman, CEO of Allscripts, will become CEO of
Allscripts-Misys
- The Board of Directors of Allscripts-Misys will be comprised of 10 directors,
6 of whom will be nominated by Misys
The Transaction is conditional on, among other things, (1) the approval of each
of Misys' and Allscripts' shareholders, (2) the receipt of necessary competition
clearances, (3) there being no material adverse change in the financial
position, trading position or prospects of either Allscripts or Misys Healthcare
since 18 March 2008; and (4) each and Misys and Allscripts having received a tax
opinion in form and substance reasonably satisfactory to it from its tax
counsel.
Misys and Allscripts have each agreed to pay the other break fees of £7.1
million and $14.2 million, respectively, under certain circumstances.
Subject to the conditions to closing being met, it is expected that the
Transaction will be completed within the third quarter of 2008.
The principal terms and conditions of the Transaction are summarised later in
this announcement, together with further information on Misys, Misys Healthcare
and Allscripts.
Misys intends to post a circular to Misys' shareholders giving full details of
the Transaction, including notice of an Extraordinary General Meeting (EGM), in
June 2008.
Commenting on the Transaction, Mike Lawrie, Chief Executive Officer of Misys, said:
"There is a huge opportunity to capitalise on the fundamental shift taking place
in the high growth, ambulatory healthcare sector where innovative technology can
improve the delivery of care. Combining our businesses will create a company
better able to take advantage of this opportunity and to maximise value for both
sets of shareholders. This will be a transformational step for our healthcare
business and will accelerate the execution of our growth strategy."
Glen Tullman, Chief Executive Officer of Allscripts, commented:
"The clinical software sector is growing rapidly. Merging two of the leading
businesses within this sector will create a comprehensive platform of products
and services that can better serve a wider range of customers and will
capitalise on this opportunity. I look forward to working with Mike Lawrie and
leveraging the benefits of the wider Misys group."
Commenting on the announcement Jeff Ubben, founder of ValueAct (Misys' largest
shareholder) and Misys Non-Executive Director said; "I applaud Mike Lawrie's
turnaround of Misys. Exiting the regulated Sesame business and hospital
businesses has positioned Misys' balance sheet to invest for growth in our core
franchises of selling software and services to physician groups and to financial
institutions. ValueAct Capital is excited about the opportunity to increase our
investment in Misys, at a significant premium to the current market price. This
is a major step in pursuit of Misys' growth strategy."
Highlights from the Misys Interim Management Statement
Misys announced positive financial results for the nine month trading period to
29 February 2008 today. Like for like revenue for the year to date was £345m up
6% (2007: £326m). The Healthcare division generated £141m of revenue for the
nine month period, ahead of the same period last year. Further details,
including the definition of like for like revenue is contained in Misys' Interim
Management Statement issued today which can be found at www.misys.com.
Analysts' presentation and webcast
An analysts' presentation will be held today at 9.00am (GMT) at Deutsche Bank,
Winchester House, 1 Great Winchester Street, London EC2N 2DB and a further
conference call at 8.30am (EST). For details of the conference call numbers
please refer to www.misys.com
A live webcast of the presentation to analysts will be available at
www.misys.com from 9.00am (GMT) today and will be available to view on demand
from approximately 2.00pm (GMT).
A listen-only dial-in facility will also be available.
Enquiries
Misys CEO Mike Lawrie +44 20 7368 2300
Media Carl Gibson +44 20 7368 2344
Investors Alex Dee +44 20 7368 2336
Allscripts President Lee Shapiro +1 312 506 1207
Lehman Brothers Lead financial advisor to Philippe Cerf +44 20 7102 1000
Misys Henry Phillips
Deutsche Bank AG Joint financial advisor John Krumins +44 20 7545 8000
and Joint corporate broker
to Misys Toby Clark
JPMorgan Cazenove Joint corporate broker to Andrew Hodgkin +44 20 7588 2828
Misys
Brunswick Jonathan Glass +44 20 7404 5959
Wendel Verbeek
Notes to editors
This announcement is for information purposes only and does not constitute an
offer or invitation to acquire or dispose of any securities or investment advice
in any jurisdiction. The information in this announcement is not for release,
publication or distribution, directly or indirectly, in or into the United
States, Australia, Canada or Japan. This announcement is not an offer to sell or
a solicitation of an offer to buy any shares to be issued pursuant to the equity
placing announced by Misys today in connection with the Transaction. The
Allscripts-Misys shares (the "Allscripts shares") to be issued to Misys and any
shares to be issued by Misys (the "Misys shares") have not been and will not be
registered under the US Securities Act of 1933, as amended (the "Securities
Act") and may not be offered or sold, directly or indirectly, in the United
States absent registration or an exemption from registration under the
Securities Act. There will be no public offering of any Allscripts shares or any
Misys shares in the United States. Neither the Allscripts shares nor the Misys
shares have been and will not be registered with any regulatory authority of any
state within the United States.
Misys (FTSE: MSY), provides integrated, comprehensive solutions that deliver
significant results to organisations in the financial services and healthcare
industries. We maximise value for our customers by combining our deep knowledge
of their business with our commitment to their success. In banking and treasury
& capital markets, Misys is a market leader, with over 1,200 customers,
including all of the world's top 50 banks. In healthcare, Misys is a market
leader, serving more than 110,000 physicians in 18,000 practice locations and
600 home care providers. Misys employs around 4,500 people who serve customers
in more than 120 countries.
Lehman Brothers, which is authorised and regulated in the UK by the Financial
Services Authority, is acting as lead adviser for Misys and no-one else in
connection with the Transaction and will not be responsible to anyone other than
Misys for providing the protections afforded to clients of Lehman Brothers or
for providing advice in relation to the Transaction or to the matters referred
to herein.
Deutsche Bank AG is authorised under German Banking Law (competent authority:
BaFin - Federal Financial Supervising Authority) and regulated by the Financial
Services Authority for the conduct of UK business. Deutsche Bank AG is also
acting as adviser for Misys and no one else in connection with the Transaction
and will not be responsible to anyone other than Misys for providing the
protections afforded to clients of Deutsche Bank nor for providing advice in
connection with the Transaction.
JPMorgan Cazenove, which is authorised and regulated in the UK by the Financial
Services Authority, is acting exclusively for Misys and no-one else in
connection with the Transaction and will not be responsible to anyone other than
Misys for providing the protections afforded to clients of JPMorgan Cazenove or
for providing advice in relation to the Transaction or to the matters referred
to herein.
This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including inter alia the
terms "believes", "plans", "expects", "may", "will", or "should" or, in each
case, their negative or other variations or comparable terminology.
These forward-looking statements include matters that are not historical facts
and include statements regarding Misys' intentions, beliefs or current
expectations concerning, among other things, Misys' results of operations,
financial condition, liquidity, prospects, growth, strategies, the outlook for
relevant markets and the proposed Transaction. By their nature, forward-looking
statements involve risk and uncertainty because they relate to future events and
circumstances. A number of factors could cause actual results and developments
to differ materially from those expressed or implied by the forward-looking
statements. Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements in this announcement reflect
Misys' view with respect to future events as at the date of this announcement
and are subject to risks relating to future events and other risks,
uncertainties and assumptions relating to Misys' operations, results of
operations, growth strategy and liquidity.
It is believed that the expectations reflected in these statements are
reasonable, but they may be affected by a number of variables which could cause
actual results or trends to differ materially, including, but not limited to,
factors that are beyond Misys plc's ability to control or estimate precisely,
such as delays in obtaining, or adverse conditions contained in, regulatory
approvals, competition and industry restructuring, changes in economic
conditions, currency fluctuations, changes in interest and tax rates, changes in
energy market prices, changes in historical weather patterns, changes in laws,
regulations or regulatory policies, developments in legal or public policy
doctrines, technological developments, the failure to retain key management, the
availability of new Transaction opportunities or the key timing and success of
future Transaction opportunities. Each forward-looking statement speaks only as
of the date of the particular statement.
Save as required by relevant law or regulation, Misys undertakes no obligation
publicly to release the results of any revisions to any forward-looking
statements in this announcement that may occur due to any change in its
expectations or to reflect events or circumstances after the date of this
announcement. Information in this announcement or any of the documents relating
to the equity placing announced by Misys today in connection with the
Transaction should not be relied upon as a guide to future performance.
Not for release, publication, or distribution in whole or in part in or into
United States, Canada, Australia or Japan.
FOR IMMEDIATE RELEASE
MISYS AND ALLSCRIPTS INC TO CREATE A LEADER IN PHYSICIANS SOLUTIONS
Introduction
Misys and Allscripts have reached a conditional agreement to combine Misys
Healthcare with Allscripts to form Allscripts-Misys Healthcare Solutions Inc. ("
Allscripts-Misys") and create a leader in the provision of clinical software and
services for the US ambulatory healthcare market (the "Transaction").
Allscripts is a NASDAQ listed leading provider of clinical software and
information solutions in the US healthcare market, which in 2007 reported
revenue of US$281.9 million and profit before taxes of US$30.7 million under US
GAAP.
Allscripts-Misys will be owned 54.5% by Misys and 45.5% by the existing
shareholders of Allscripts (each calculated on a fully diluted basis) and will
be listed on NASDAQ. Misys will continue to own 100% of its existing Banking and
Treasury & Capital Markets divisions and will continue to be listed on the
London Stock Exchange.
Misys will contribute $330 million (approximately £165 million) in cash as part
of the Transaction. The cash element will be financed by new banking facilities
and a placing of new ordinary shares in Misys at 175p per share, which is fully
underwritten by ValueAct Capital, Misys' largest shareholder, to raise
approximately £75 million ($150 million) (representing a premium of 23.5% to
last night's closing price). ValueAct Capital has committed to vote in favour of
the Transaction at the Misys shareholders' meeting to be convened to approve the
Transaction.
The Transaction will establish a leader in the provision of clinical software
and services which will empower physicians to deliver healthcare efficiently and
effectively. The Transaction combines a leader in Practice Management (PM) and a
leader in Electronic Health Records (EHR). Allscripts-Misys will be positioned
to capitalise on the rapid transformation of the US healthcare industry,
capturing the expected convergence of technology and healthcare.
Following the sale of Misys' Sesame and Hospital businesses, the restructuring
of the Banking, Treasury and Capital Markets and Healthcare businesses and the
creation of alliances with world class partners, this transformational deal will
accelerate the execution of Misys' growth strategy outlined in March 2007.
The Transaction is conditional on, among other things, (1) the approval of each
of Misys' and Allscripts' shareholders, (2) the receipt of necessary competition
clearances, (3) there being no material adverse change in the financial
position, trading position or prospects of either Allscripts or Misys Healthcare
since 18 March 2008; and (4) each and Misys and Allscripts having received a tax
opinion in form and substance reasonably satisfactory to it from its tax
counsel.
Misys and Allscripts have each agreed to pay the other break fees of £7.1
million and $14.2 million, respectively, under certain circumstances.
Misys intends to post a circular to Misys' shareholders giving full details of
the Transaction, including notice of an Extraordinary General Meeting (EGM), in
June 2008.
Subject to the conditions to closing being met, it is expected that the
Transaction will be completed within the third quarter of 2008.
Background to and reasons for the Transaction
The current market for core administrative and clinical software in the
ambulatory physician healthcare IT segments is very fragmented. Both Allscripts
and Misys Healthcare have leadership roles in different segments of this market.
Allscripts is generally known for its clinical product leadership in the large
practice segments. Misys Healthcare is known for its leadership in core practice
management applications with a large and loyal legacy customer base of
physicians in the small and mid-sized segments. Allscripts and Misys Healthcare
have highly complementary products and clients.
Allscripts has demonstrated good revenue growth, both organically and through
acquisitions. The Transaction is a unique opportunity for Misys to take control
of a fast-growing business, combining Misys Healthcare's strength in Practice
Management with Allscripts' strength in Electronic Health Records (EHR).
According to recent data, the number of physicians in the US that use EHR in
their practice is growing. Further penetration is expected to be driven by the
federal government as well as by practices seeking to reduce costs. It is
estimated that this segment represents a c. $5 billion opportunity by 2015. In
the fast growing Ambulatory EHR market, Allscripts has valuable name recognition
and their TouchWorks and HealthMatics software offerings are well-recognized.
Allscripts-Misys will focus on presenting its enlarged customer base with
leading edge portfolio of products and services whilst continuing to support and
maintain all the existing products from both companies.
Misys and Allscripts expect Allscripts-Misys to achieve annual pre-tax cost
synergies of up to $25 million to $30 million within the next three years from
reduction in overheads, savings in R&D, marketing and administrative functions.
Misys and Allscripts also expect revenue synergies from cross-selling into each
other's respective client bases.
About Allscripts-Misys
Allscripts-Misys will combine complementary and best of breed products, allowing
it to provide a broader range of IT solutions to the growing healthcare
industry. Allscripts-Misys will:
- be a leading pure-play in the ambulatory physician market
- covers approximately 1 out of 3 of all physicians in America
- bring together Misys Healthcare's strength in PM and Allscripts'
strength in EHR
- have a large installed base to sell leading EHR product into
- drive sales growth, improve efficiency and reduce operating costs and
- have a strong, experienced management team drawing on the strengths
from both companies.
Management and organisation of Allscripts-Misys
The Board of Directors of Allscripts-Misys will comprise 10 directors, 6 of whom
will be nominated by Misys. The CEO of Allscripts-Misys will be on the Board.
The other three directors will be independent.
Mike Lawrie will become Executive Chairman of Allscripts-Misys in addition to
retaining his role as CEO of Misys. Glen Tullman, CEO of Allscripts, will become
CEO of Allscripts-Misys.
Information on Allscripts
Allscripts is an established leader in the clinical software and information
solutions market and a distributor of medications to more than 40,000 physicians
and more than 700 hospitals in the US. Allscripts trades on NASDAQ.
Headquartered in Chicago, Allscripts employs more than 1,150 people across the
US. The company has the following main segments:
- Clinical Solutions Group: provides a suite of clinical and
administrative software solutions to physician practices including electronic
health record (EHR), electronic prescribing, practice management, emergency
department information system (EDIS), hospital care management and document
imaging solutions
- Physicians Interactive Group: addresses the educational needs of
physicians by linking them with pharmaceutical companies, medical product
suppliers and health plans via the Internet. The group is an industry leader
with a current client list that includes 8 of the world's 10 largest
pharmaceutical companies
- Medication Solutions Group: offers pre-packaging of medications for
physicians to dispense at the point of care.
For the year ended 31 December 2007, Allscripts reported revenue of $281.9
million, operating profit of $28.1 million and profit before tax of $30.7
million. As at 31 December 2007, Allscripts had gross assets of $578.1 million.
Allscripts financial information is reported under US GAAP.
Information on Misys Healthcare
Misys Healthcare, a wholly-owned division of Misys, develops and supports
reliable, easy-to-use software and services that enable physicians and
caregivers to more easily manage the complexities of healthcare. The division's
products include electronic health records (EHR) for ambulatory, departmental
systems, practice management systems and EDI connectivity. Misys Healthcare is
one of the largest providers of IT solutions in the US healthcare market,
serving more than 110,000 physicians in 18,000 practice locations, 600 home care
providers and hundreds of commercial laboratories, clinics, managed services
organizations, integrated delivery networks and other related organizations.
Misys Healthcare has over 1,500 employees.
For the year ended 31 May 2007, Misys Healthcare reported revenue from
continuing operations of £196.0 million and operating profit before exceptional
items of £20.6 million (unaudited). Misys Healthcare financial information is
reported under IFRS and is shown as previously reported.
Information on Misys
Misys is a leader in the global application software and services market, which
provides mission critical software to clients in the banking industry and
healthcare institutions. Misys trades on the London Stock Exchange.
Headquartered in London, Misys employs 4,500 people worldwide. The company has
the following businesses in addition to Misys Healthcare:
- Banking: delivers retail banking, corporate/wholesale banking
(including trade finance and payments) and universal banking integrated
solutions and that drive revenue generation, performance and efficiency
improvements for financial institutions across the globe. A market leader, with
over 1,200 customers in more than 120 countries, including all of the world's
top 50 banks
- Treasury and Capital Markets: creates integrated, comprehensive
solutions for financial institutions and corporate treasury departments across
the globe, enabling them to manage their capital market activities across
multiple asset classes
For the year ended 31 May 2007, Misys reported revenue from continuing
operations of £469.7 million and operating profit before exceptional items of
£55.8 million (unaudited). Misys financial information is reported under IFRS.
Principal terms and conditions of the Transaction
As part of this Transaction, Misys Healthcare will become, through merger, a
wholly-owned subsidiary of Allscripts, which will be renamed Allscripts-Misys
Healthcare Solutions Inc. Together with Misys Healthcare, Misys will contribute
$330 million in cash in return for a controlling stake of 54.5% in
Allscripts-Misys (calculated on a fully diluted basis). $330 million in cash
will also be distributed to Allscripts' existing shareholders on a pro-rata
basis as a special dividend. The payment of dividend is conditional on
completion of the merger. The record date for the distribution of the dividend
will be the date that is one day prior to completion. The dividend will be paid
approximately five business days after completion. The existing shareholders of
Allscripts will hold the remaining 45.5% of Allscripts-Misys. Both of these
figures are stated on a fully diluted basis.
In order to effect the merger, a Merger Agreement dated 18 March 2008 (the
Merger Agreement) has been entered into between Misys, Misys Healthcare,
Allscripts and a wholly-owned subsidiary of Allscripts. Under the terms of the
Merger Agreement, the merger will take effect only if certain conditions are
either fulfilled or waived. The Transaction is conditional on, among other
things, (1) the approval of each of Misys' and Allscripts' shareholders, (2) the
receipt of necessary competition clearances, (3) there being no material adverse
change in the financial position, trading position or prospects of either
Allscripts or Misys Healthcare since 18 March 2008; and (4) each and Misys and
Allscripts having received a tax opinion in form and substance reasonably
satisfactory to it from its tax counsel.
Unless otherwise agreed between Allscripts and Misys, the conditions to the
merger completion must be satisfied by 31 October 2008, extendable by either
party to 31 December 2008 if the necessary competitive clearances have not been
received. However, it is expected that the Transaction will be completed within
the third quarter of 2008.
By entering into the Merger Agreement, Misys has agreed, amongst other things,
to:
- procure the merger of Misys Healthcare with and into a wholly-owned
subsidiary of Allscripts;
- provide Allscripts with representations and warranties in relation to
itself and Misys Healthcare;
- procure that Misys Healthcare will be run in the ordinary course
pending completion of the merger;
- convene an extraordinary general meeting of its shareholders to seek
their approval to proceed with the Transaction;
- not solicit any alternative offers for Misys Healthcare; and
- pay Allscripts a break fee of £7.1 million if the Transaction does
not proceed and (1) Misys has breached its non-solicitation obligations
or its shareholders have not approved the Transaction and an alternative
Transaction involving Misys Healthcare is entered into within twelve
months; or (2) the Board of Directors of Misys withdraws its
recommendation to shareholders to approve the Transaction and
Allscripts does not require Misys to proceed with the extraordinary
general meeting in any event.
Similarly, by entering into the Merger Agreement, Allscripts has agreed, amongst
other things, to:
- procure the merger of Misys Healthcare with and into a wholly-owned
subsidiary of Allscripts;
- provide Misys with representations and warranties in relation to
itself;
- to run its business in the ordinary course, pending completion of the
merger;
- convene an extraordinary general meeting of its shareholders to seek
their approval to proceed with the Transaction;
- not solicit any alternative offers for Allscripts; and
- pay Misys and Misys Healthcare a break fee of $14.2 million if the
Transaction does not proceed and (1) Allscripts has breached its
non-solicitation obligations or its shareholders have not approved the
Transaction and an alternative transaction involving Allscripts is
entered into within twelve months; or (2) the Board of Directors of
Allscripts withdraws its recommendation to shareholders to approve the
Transaction and Misys does not require Allscripts to proceed with the
extraordinary general meeting in any event.
As part of the Transaction, Misys and Allscripts have entered into a
Relationship Agreement dated 18 March 2008 (the Relationship Agreement). The
Relationship Agreement is designed in part to ensure that Misys will be able to
comply with its UK regulatory requirements and Allscripts Misys - Healthcare
Solutions will be able to comply with its US regulatory requirements following
the merger.
The following points in relation to the governance of Allscripts-Misys and the
relationship between it and Misys have been agreed and are reflected in the
Relationship Agreement and the constitutional documents of Allscripts-Misys:
- Allscripts-Misys' Board of Directors will comprise 10 members, 6 of
whom will be nominated by Misys (including the Chairman of the Board), 3 of whom
will be independent directors and the tenth will be the CEO. It is intended to
amend the Allscripts by-laws so that amongst other things, a vote of a simple
majority of shareholders, as opposed to 80% as provided currently, is required
to remove a board member;
- The quorum of the Allscripts-Misys Board of Directors will be 6
directors;
- Allscripts-Misys Board will have the power to form and delegate
powers to various committees. Prescribed committees will include an Independent
Nominating Committee and an Audit Committee (each comprising 3 independent
directors), a Nominating and Governance Committee (comprising two Misys nominees
and an independent director), a Compensation Committee (comprising two
independent directors and the Chairman) and a Disclosure Committee (comprising
key Allscripts-Misys management and operations personnel);
- Misys will not be permitted to dispose of 15% or more of the issued
shares of Allscripts-Misys without the prior approval of the Allscripts-Misys
Board;
- Other than pursuant to a transaction approved by the Audit Committee,
Misys will not be permitted to increase its shareholding in Allscripts Misys -
Healthcare Solutions above 60% (calculated on a fully diluted basis);
- Any dilution of Misys' shareholding in Allscripts-Misys in respect of
Allscripts-Misys share incentives is limited to 1.5% in total in the period up
to 31 May 2010 (and new Allscripts-Misys incentives may not be issued at all
thereafter without the agreement of the Allscripts-Misys Board); and
- Allscripts-Misys and Misys are to have common auditors and financial
reporting periods.
Financing of the Transaction
As separately announced today, Misys is launching a conditional placing of
42,857,143 new ordinary shares, with a nominal value of 1 pence per share
("Placing Shares") at a price of 175 pence per Placing Share (the "Placing
Price") and representing approximately 8.5 per cent of Misys' existing issued
share capital to qualifying investors (the "Placing"). The Placing Price
represents a 23.5% premium to the closing price of a Misys ordinary share as at
close of business on 17 March 2008. Gross proceeds of the placing are expected
to amount to approximately £75 million (US$150 million).
Misys' principal shareholder, ValueAct, has demonstrated its support of the
Transaction by agreeing to underwrite the issue of the Placing Shares through
its affiliate ValuaAct Capital Master Fund L.P. (acting through its general
partner VA Partners I, LLC) (the ValueAct Fund). Affiliates within the ValueAct
group currently control approximately 19.4 per cent. of the issued voting share
capital of Misys. If the conditions to the Placing are satisfied, to the extent
that no shares are placed with investors, Affiliates within the Underwriter's
group would increase, if the conditions to the Placing are satisfied, to
approximately 25.8%.
The ValueAct Fund has deposited US$147 million, being an amount equal to its
underwriting commitment less commission (at an exchange rate of £1:US$2,
determined as at the close of business in London on Monday 17 March 2008), into
an escrow account with JPMorgan Cazenove Limited, as escrow agent (the "Escrow
Funds"). The Escrow Funds will be used to fully discharge the ValueAct Fund's
underwriting commitment on the closing of the Placing, if required, pursuant to
the terms and conditions of the Placing. The Placing is being managed by
JPMorgan Cazenove Limited, as placing agent and sole bookrunner (the "Placing
Agent").
The Placing will be the subject of an accelerated bookbuild and will be
conducted in accordance with the terms and conditions set out in the separate
announcement relating to the Placing issued by Misys today. As the Placing is
conditional on, inter alia, the closing of the Transaction, placees procured by
the Placing Agent will be issued with conditional placing letters on the close
of the bookbuild, detailing their commitment. On the closing of the
Transaction, the Placing Shares will be issued and credited as fully paid and
will rank pari passu in all respects with the existing ordinary shares in Misys,
including the right to receive any future dividends and other distributions.
Application will be made for the Placing Shares to be admitted to the Official
List and to trading on the Main Market of the London Stock Exchange on closing
of the Placing, which is expected to occur on the same day as the closing of the
Transaction.
In the event that the Placing does not close in accordance with its terms by 31
December 2008, then the obligations of Misys to issue the Placing Shares will be
terminated.
New bank debt facility
Misys has procured a committed debt financing package of $305 million in support
of the Transaction. This bank debt facility will comprise a term loan and a
revolving credit facility, both with terms of 5 years. The Facilities will be
cancelled in full if closing of the Transaction has not occurred by 31 December
2008. The bank debt will provide part of the funding necessary to consummate the
Transaction (including payment of related fees and expenses) and to provide
ongoing working capital facilities.
Effects of the Transaction on Misys
The Transaction is expected to be earnings accretive before amortisation of
acquired intangibles, exceptional costs and purchase accounting adjustments for
Misys in the first full financial year post completion, taking into account
expected synergies.
Current trading and prospects
Misys continues to make good progress with its market leading solutions despite
the difficulties facing some institutions from global credit issues. To date
Misys has not seen any changes to demand for its products and believes this is
confirmed by its order intake. Misys expects full year group revenue growth of
between 2%-4%, which equates to a range of £479 million to £488 million (2007:
£469.7 million) and a Group operating margin of 15%. This is ahead of the plan
laid out at the Misys Turnaround presentation in March 2007.
Dividend policy
Misys expects to declare a final dividend in respect of the year ending 31 May
2008. Following the Transaction, the Board intends to alter its dividend policy
in order to invest cash flow in its operations. Misys does not intend to pay a
dividend going forward but will keep this dividend policy under regular review.
Expected timetable
Misys intends to post a circular to Misys' shareholders giving full details of
the Transaction, including notice of an Extraordinary General Meeting (EGM), in
June 2008. Subject to the conditions to closing being met, completion of the
Transaction is expected to occur in the third quarter of 2008.
Analysts' presentation and webcast
An analysts' presentation will be held today at 9.00am (GMT) at Deutsche Bank,
Winchester House, 1 Great Winchester Street, London EC2N 2DB and a further
conference call at 8.30am (EST). For details of the conference call numbers
please refer to www.misys.com
A live webcast of the presentation to analysts will be available at
www.misys.com from 9.00am (GMT) today and will be available to view on demand
from approximately 2.00pm (GMT).
A listen-only dial-in facility will also be available.
Enquiries
Misys CEO Mike Lawrie +44 20 7368 2300
Media Carl Gibson +44 20 7368 2344
Investors Alex Dee +44 20 7368 2336
Allscripts President Lee Shapiro +1 312 506 1207
Lehman Brothers Lead financial advisor to Philippe Cerf +44 20 7102 1000
Misys Henry Phillips
Deutsche Bank AG Joint financial advisor John Krumins +44 20 7545 8000
and Joint corporate broker
to Misys Toby Clark
JPMorgan Cazenove Joint corporate broker to Andrew Hodgkin +44 20 7588 2828
Misys
Brunswick Jonathan Glass +44 20 7404 5959
Wendel Verbeek
Notes to editors
This announcement is for information purposes only and does not constitute an
offer or invitation to acquire or dispose of any securities or investment advice
in any jurisdiction. The information in this announcement is not for release,
publication or distribution, directly or indirectly, in or into the United
States, Australia, Canada or Japan. This announcement is not an offer to sell or
a solicitation of an offer to buy any shares to be issued pursuant to the equity
placing announced by Misys today in connection with the Transaction. The
Allscripts-Misys shares (the "Allscripts shares") to be issued to Misys and any
shares to be issued by Misys (the "Misys shares") have not been and will not be
registered under the US Securities Act of 1933, as amended (the "Securities
Act") and may not be offered or sold, directly or indirectly, in the United
States absent registration or an exemption from registration under the
Securities Act. There will be no public offering of any Allscripts shares or any
Misys shares in the United States. Neither the Allscripts shares nor the Misys
shares have been and will not be registered with any regulatory authority of any
state within the United States.
Misys (FTSE: MSY), provides integrated, comprehensive solutions that deliver
significant results to organisations in the financial services and healthcare
industries. We maximise value for our customers by combining our deep knowledge
of their business with our commitment to their success. In banking and treasury
& capital markets, Misys is a market leader, with over 1,200 customers,
including all of the world's top 50 banks. In healthcare, Misys is a market
leader, serving more than 110,000 physicians in 18,000 practice locations and
600 home care providers. Misys employs around 4,500 people who serve customers
in more than 120 countries.
Lehman Brothers, which is authorised and regulated in the UK by the Financial
Services Authority, is acting as lead adviser for Misys and no-one else in
connection with the Transaction and will not be responsible to anyone other than
Misys for providing the protections afforded to clients of Lehman Brothers or
for providing advice in relation to the Transaction or to the matters referred
to herein.
Deutsche Bank AG is authorised under German Banking Law (competent authority:
BaFin - Federal Financial Supervising Authority) and regulated by the Financial
Services Authority for the conduct of UK business. Deutsche Bank AG is also
acting as adviser for Misys and no one else in connection with the Transaction
and will not be responsible to anyone other than Misys for providing the
protections afforded to clients of Deutsche Bank nor for providing advice in
connection with the Transaction.
JPMorgan Cazenove, which is authorised and regulated in the UK by the Financial
Services Authority, is acting exclusively for Misys and no-one else in
connection with the Transaction and will not be responsible to anyone other than
Misys for providing the protections afforded to clients of JPMorgan Cazenove or
for providing advice in relation to the Transaction or to the matters referred
to herein.
This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including inter alia the
terms "believes", "plans", "expects", "may", "will", or "should" or, in each
case, their negative or other variations or comparable terminology.
These forward-looking statements include matters that are not historical facts
and include statements regarding Misys' intentions, beliefs or current
expectations concerning, among other things, Misys' results of operations,
financial condition, liquidity, prospects, growth, strategies, the outlook for
relevant markets and the proposed Transaction. By their nature, forward-looking
statements involve risk and uncertainty because they relate to future events and
circumstances. A number of factors could cause actual results and developments
to differ materially from those expressed or implied by the forward-looking
statements. Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements in this announcement reflect
Misys' view with respect to future events as at the date of this announcement
and are subject to risks relating to future events and other risks,
uncertainties and assumptions relating to Misys' operations, results of
operations, growth strategy and liquidity.
It is believed that the expectations reflected in these statements are
reasonable, but they may be affected by a number of variables which could cause
actual results or trends to differ materially, including, but not limited to,
factors that are beyond Misys plc's ability to control or estimate precisely,
such as delays in obtaining, or adverse conditions contained in, regulatory
approvals, competition and industry restructuring, changes in economic
conditions, currency fluctuations, changes in interest and tax rates, changes in
energy market prices, changes in historical weather patterns, changes in laws,
regulations or regulatory policies, developments in legal or public policy
doctrines, technological developments, the failure to retain key management, the
availability of new Transaction opportunities or the key timing and success of
future Transaction opportunities. Each forward-looking statement speaks only as
of the date of the particular statement.
Save as required by relevant law or regulation, Misys undertakes no obligation
publicly to release the results of any revisions to any forward-looking
statements in this announcement that may occur due to any change in its
expectations or to reflect events or circumstances after the date of this
announcement. Information in this announcement or any of the documents relating
to the equity placing announced by Misys today in connection with the
Transaction should not be relied upon as a guide to future performance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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