Deal extends Misys's reach

Click to follow

Misys is buying the Dublin-based IT group Sophis in a £375m deal to boost its capital markets software business, adding more investor clients such as asset managers and hedge funds.

The purchase, from the private equity firm Advent International, will see Misys use its global reach to sell Sophis systems into high-growth Asian and Middle Eastern markets, and should boost Misys's earnings per share by at least a quarter.

Misys is stronger in software relating to bonds, credit, foreign exchange and interest-rate derivatives, and has a bigger "sellside" client base among investment banks and brokers, while Sophis focuses more on equity and equity derivatives and has more "buyside" investor clients.

Milan Radia, an analyst at Jefferies, said Sophis represented "a compelling acquisition" for Misys. "Together, they create a heavyweight market leader" in the treasury and capital markets (TCM) software business, Mr Radia wrote in a note to clients.

The deal values Sophis's equity at £235m, with net debt of £140m. It may also make earn-out payments of a further £4m.