Misys buys Sunquest for £286m to tighten US hold

Click to follow
The Independent Online

Misys, a software supplier, has strengthened its hold on the US healthcare market by buying the Nasdaq-listed company Sunquest, a provider of IT systems to hospitals, for $404m (£286m).

The deal will see Misys supply computer systems to about 1,200 hospitals and 85,000 physicians in the US. It also gives Misys a presence in the acute-care market. Shares in the company closed up 3p at 488p. Kevin Lomax, chairman of Misys, said: "The acquisition of Sunquest consolidates Misys' position as a leading provider of healthcare information systems, extending Misys' presence into the acute-care market making it well placed to exploit the expected growth in clinical systems."

The company is making a cash tender offer for all of Sunquest's shares at $24 a share, a premium of about 63 per cent to Sunquest's Friday closing price. It is funding the deal from its existing resources.

Last week, Misys made a £75m agreed bid for DBS Management, which operates a network of independent financial advisers, to boost its own IFA network.

It also announced the closure of its two online consumer financial service businesses, theformula.com and screentrade, which will cost £10m and involve the loss of more than 100 jobs.

Misys said yesterday that it expected to start the tender offer for Sunquest early next month and expects it to be completed in August.

Sunquest's board has unanimously recommended the tender offer. Shareholders representing about 76 per cent of the equity have already committed to tender their holdings.

Tom Skelton, chief executive of Medic, Misys' healthcare business, will assume overall responsibility for the company's enlarged healthcare division.

Sidney Goldblatt, Sunquest's co-founder, chairman and chief executive, will step down from his executive responsibilities once the deal has been completed, although he will maintain a "close" relationship with the business.

Mr Goldblatt said: "Sunquest's fit with Misys, a larger and more diverse company, is an excellent one. The acquisition of Sunquest by Misys should foster the continued success and growth of Sunquest."

Misys said it expected the purchase to enhance earnings, before goodwill and exceptional costs, in the year ended 31 May 2002.

In 2000, Sunquest reported a pre-tax profit of $20.1m on sales of $120.6m. Taking the Sunqueast deal into account, as well as its planned acquisition of DBS Management, Misys said its pro forma net debt would have totalled £338.8m as of 30 November.