Misys expands its IFA network with £75m DBS bid

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The Independent Online

Misys, the it software and services company, yesterday made an agreed £75m bid for DBS Management, which operates a network of independent financial advisers (IFA), while also warning that profits from its core banking arm would be "slightly" less than market expectations.

The deal, worth 150p a share in cash for DBS shareholders, will enable Misys to expand its own IFA network and merge the two e-commerce units in that sector. The offer represents a premium of 170 per cent to DBS's share price the day before it announced it was in talks with third parties.

Shares in DBS shot up 98.6 per cent last night at 145p. But stock in Misys fell 5.5 per cent to 467p. The second-worst fall on the FTSE 100 followed Misys' warning that while activity levels in banking remained "good", evidence is emerging that larger orders were taking longer to close and that order intake was slower than expected.

Even so, Misys ­ which provides software to the banking, healthcare and insurance sectors ­ said it expected its results for the year ending in May will be "satisfactory" overall and will confirm a "progressive return" to its long-term growth rate.

Misys said operating profits and order intake in its healthcare division in the second half of the year were "well ahead" of the first half. The insurance division also continued to grow "strongly", it said.

Yesterday's acquisition of DBS Management will add about 2,900 IFAs to the 4,350 now working for Misys, including the Countrywide IFA brand. The resulting 7,250-strong force will be one of the main IFA networks in the UK.

Kevin Lomax, chief executive of Misys, said: "The combination of our [m-link internet] portal businesses and respective strengths [of the DBS equivalent AssureWeb] .... will benefit customers, product providers and IFAs alike."

Misys cited a growing demand from consumers for "quality" independent financial advice and said IFAs would play an increasingly central role in meeting consumer financial planning needs.

DBS's chairman Ken Davy and David Stewart, chief executive, will stay on.

DBS also announced results yesterday for the year ending in March, showing a pre-tax loss of £1.4m, from a profit of £5.2m last year, after heavy investment in AssureWeb. DBS's sales were £191.5m, up from £179m.

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