US tycoon set to make billions on British tech giant: Misys returns in £5.5bn float after being sold for £1.3bn
By SABAH MEDDINGS From This Is Money
Britain’s original tech giant is returning to the London market – netting its secretive US owners millions and firing the starting gun on a float bonanza.
Misys, which builds financial software, hopes to sell 25 per cent of the business in what will be the biggest market float this year.
It plans to raise £500million in a deal that would value it at almost £5.5billion, far above the £1.3billion paid by private equity firm Vista Equity Partners in 2012.
Misys is owned by Tahoe Holdco Cayman Ltd – a business registered in the Cayman Islands tax haven. That in turn is controlled by Vista, which is American.Tycoon Robert Smith married former Playboy model Hope Dworaczyk, 31, in a lavish ceremony on the Amalfi Coast in Italy, featuring performance s by John Legend and Seal
Vista was founded in 2000 by tycoon Robert Smith, 53, a former Goldman Sachs banker. He has a private wealth of about £2billion.
In 2015 he married former Playboy model Hope Dworaczyk, 31, in a lavish ceremony at a villa in Ravello, on the Amalfi Coast in Italy, featuring a performance by American singer John Legend and pop star Seal.
It is not known how much Smith will make from the sale of Misys. But under his leadership Misys has merged with Turaz – a former division of Thomson Reuters – and in 2014 it bought Silicon Valley firm IND Group for an undisclosed sum.
Smith’s funds at Vista are renowned for their stellar returns – 30 per cent-plus on their original investment.
Buying Misys for £4billion less than it currently plans to refloat it for will add to these bumper profits.
Yesterday, Nadeem Syed, chief executive of Misys, assured investors the business had been ‘transformed’ during its four years at Vista.
Revenue is 73.3pc higher at £715.8m and earnings were up 200 per cent at £259.5million. However, the company’s debts have soared from £107million to £1.3billion.
Syed, who joined in 2012, said: ‘From our perspective we have gone through a transformation. Coming out into the market is the right thing to do.’
‘The UK is our backyard. London is very much still the heart of the financial market.
Brexit vote or not, we still believe the UK is open for business.’ The firm will raise £500million selling the first tranche of shares, before listing others in the following weeks – reaching a total of 25 per cent.
Vista and the company’s management will make millions from a partial sale of their stake, as are the bankers in the transaction.
Goldman Sachs, BofA Merrill Lynch, JP Morgan, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank are set to receive substantial rewards.
Misys employs 4,700 people globally, about 10 per cent of them in London, and counts 48 of the world’s top banks as its clients.
Its return to the market adds to a growing list of flotations as firms seek to cash in on the strength of the stock market since the Brexit vote.
The FTSE 100 this week broke through the 7,000 mark for the first time since April 2015. Telecoms giant O2 will be watching carefully as it prepares for its own IPO later this year or in early 2017.
That float is expected to value the firm at £10.5billion – dwarfing the Misys deal and showing flotation activity is firmly back on track. Others gearing up include price comparison site GoCompare, which is splitting off from insurer Esure – valuing it at £450million.
Waste management group Biffa is also joining the party, hoping to raise £270million, and valuing the business at about £1billion.
Scott McCubbin, accountancy giant EY’s IPO leader for UK and Ireland, said: ‘We could well see a resurgence of IPOs in 2017, as firms look to take advantage of global investor interest in the UK market.
IMAGE: Tycoon Robert Smith married former Playboy model Hope Dworaczyk, 31, in a lavish ceremony on the Amalfi Coast in Italy, featuring performance s by John Legend and Seal
