Misys, a UK-listed financial software provider, has failed to sell its retail advisory arm, Sesame, in its deal with UK-based mid-market Montagu Private Equity to off-load its general insurance operation for £182m (US$316.9m).
Misys General Insurance operates two arms, Misys Financial Systems, which provides hardware, software and IT services to UK general insurance intermediaries, and Misys Insurance Management, which is also known as Countrywide and is a network of independently owned insurance brokers.
In the 12 months to May 31 last year, MGI posted earnings before interest, tax, depreciation and amortisation of £17.5m on sales of £33.7m. The business employs 300 people and is headquartered in Worcester.
Jason Gatenby, director of Montagu Private Equity said: “Since the current managers [led by chief executive Phillip Bell] were appointed to MGI in 1999, the company has more than doubled its profits. We were attracted to the business by its excellent record of profit growth and cash generation, the potential for growth in commercial lines business and the possibility of synergistic acquisitions.”
Although MGI went for more than its estimated £150m price tag, the failure to sell Sesame is a blow to Misys, which had hired Lexicon Partners last year and initially considered a flotation or sale more than three years ago.
Sesame was formed from five separate independent financial advisory businesses but regulatory delays to reforms of the UK financial advisory market, which had been “polarised” between independent and tied advice, and concerns about a potential
mis-selling legacy dimmed its chances of making more than the £100m-plus invested in buying the companies underlying the firm.