Brexit volatility wipes £1bn off Misys IPO

Kenny Wastell
17 October 2016

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Vista Equity Partners-backed Misys is the latest firm to be affected by uncertainty in the UK public markets, with the banking software provider reportedly cutting the value of its forthcoming IPO by ТЃ1bn.

The business, which this month announced its intention to float, has requested permission from the UK Listing Authority to reduce its free-float from 25% to 20%, a source close to the matter told unquote".

The source confirmed Vista is still looking to partially divest its stake through the process, though it is believed the firm is looking to sell a smaller stake.

The development has widely been attributed to market volatility owing to the UK's vote to leave the European Union.

It is understood that, as was first reported by The Sunday Times, the projected value of the IPO has been reduced from £4.5bn to somewhere in the region of £3.5bn.

At the time of its IPO announcement, Misys said it intended to raise £500m through the process, which was expected to take place in early November, with the proceeds primarily earmarked for the repayment of existing debt.

A spokesperson for Misys declined to comment on the reports.

Vista acquired Misys in a £1.27bn take-private in March 2012. The deal, which valued the company's shares at 350 pence apiece, saw Vista see off competition from rivals including CVC Capital Partners and ValueAct Capital Partners.

Following the deal, Vista merged Misys with treasury and capital markets software provider Turaz, originally owned by Thomson Reuters.

Founded in 1979 by Kevin Lomax as a computer systems supplier to UK insurance brokers, Misys sells software to banking and investment companies. It has a headcount of 4,600 across 51 offices.

The company generated revenues of €811.4m and adjusted EBITDAC of €293.9m in the year ending May 2016. European sales account for 55% of its revenues, with the Americas accounting for 17%.

Goldman Sachs, Bank of America Merrill Lynch and JP Morgan Cazenove will act as joint sponsors, joint global coordinators and joint bookrunners for the upcoming flotation. Morgan Stanley is also acting as joint global coordinator and joint bookrunner, while Barclays, Credit Suisse and Deutsche Bank are acting as joint bookrunners.