MISYS plc TO SELL SESAME TO FRIENDS PROVIDENT
Misys plc, the global software and solutions company, announces today (15 May 2007) that it has agreed to sell 100% of its independent financial advisers support services business, Sesame, to Friends Provident plc. The gross proceeds from the sale are expected to be in excess of £90m, comprising £75m in cash together with a reduction of £17m in the existing guarantee that Misys is required to fund. A further balancing payment/receipt will be determined by reference to the completion balance sheet of Sesame at 31 May 2007.
The sale to Friends Provident follows the announcement by Misys on 8 March that it had signed non binding heads of agreement to sell the majority of Sesame to the Sesame management. Subsequent to that, Misys received a proposal from Friends Provident which significantly reduces the loss on disposal and delivers value which is certain. Consequently, the Board viewed the terms of this proposal as being more attractive for shareholders. Under the terms announced today, Misys estimates that the loss on disposal of Sesame will fall from around £50m, as previously outlined, to between £25 and £30m.
Sesame is one of the largest suppliers of support services to Independent Financial Advisers in the UK. As at 30 November 2006 gross assets of Sesame were £205m. For the year ending 31 May 2006, Sesame reported revenue of £370m and profit before taxation of £1m, which includes net finance income of £2.9m. The proceeds from this transaction will be used to reduce Misys’ gross borrowings. As a result of the transfer of cash balances in Sesame, Misys’ net borrowings are expected to increase by approximately £20m. Misys will have no continuing exposure arising from the Sesame businesses, apart from, as customary for a transaction of this type, any as may arise post-completion under the sale documentation.
Mike Lawrie, Chief Executive, Misys plc, said: ‘Sesame is a great business but it is not consistent with Misys’ strategy going forward. Friends Provident is an ideal home for Sesame and today we are announcing a deal which is good news for our shareholders as well as for Sesame, its employees and customers. This enables Misys to focus solely on driving growth and profitability in our core software and solutions businesses.’
Ben Gunn, Director, Friends Provident plc, said: “We are delighted with the opportunity to acquire this strong brand and its talented management team. Sesame is an excellent fit and it builds upon our existing strategy of investing in high quality distributors.”
Sesame is a regulated business and its sale is therefore subject to the FSA’s consent to the change of control. Closing is subject to receipt of this consent from the FSA.
ANALYST / INVESTOR ENQUIRIES
MEDIA ENQUIRIES
Josh Rosenstock
Tel: +44 (0) 20 7368 2327
Mob: +44 (0) 7921 910 914
Email: josh.rosenstock@misys.co.uk
Tel: +44 (0) 20 7368 2327
Mob: +44 (0) 7921 910 914
Email: josh.rosenstock@misys.co.uk
