November 12th, 2010, Paris – Advent International, the global private equity firm, announced today that it has agreed to sell Sophis, a global vendor of capital markets software solutions, to Misys for an equity value of €273m (£235m). Sophis had net debt of €162m (£140m) at 30 September 2010, giving an enterprise value of €435m (£375m). Misys is a global application software and services company.
Advent International acquired a majority stake in Sophis in July 2007. In June 2008, having successfully managed the transition, Advent reinvested in the company, along with the management, to acquire the remaining stake held by the company’s founder.
Today, Sophis is a leading global provider of cross-asset, front-to-back office securities trading systems, with particular strength in portfolio and risk management. Sophis solutions are used by approximately 130 financial institutions on both the sell-side (investment banks) and the buy-side (asset managers and hedge funds). Sophis is headquartered in Dublin and employs about 360 people.
Under Advent’s ownership and in partnership with its management team and employees, Sophis built the foundations for strong growth in a rapidly evolving market, with an increase in turnover from €48m in 2006 to €74m in 2009. Despite the 2008 financial turmoil and in line with its growth strategy, Advent continued supporting the development of Sophis, which invested heavily in R&D and built-up a worldwide client base served through local offices (notably the US, the UK and Asia). Sophis’s buy-side development was especially strong over the period, supported by a tailor made buy-side offering. At the same time, Sophis was transitioned from a family-owned business with limited support functions to a mature Company with state-of-the-art reporting tools. The management team was strengthened with the arrivals of Pascal Xatart as Sophis CEO, Sergio Giacoletto, Advent International Operating Partner, as Sophis Chairman and Paul Bosson as CFO.
Pascal Stefani, Managing Director of Advent International in France commented: “We are proud of the business transformation facilitated by Sophis’s management team from a family-owned French software company into a leading global actor within the financial technology sector. Misys’s strong position as a leader in providing solutions to organisations in the financial services industry makes it the ideal acquirer and we are convinced that the future of the combined entity will be extremely strong.”
Pascal Xatart, Sophis CEO, added: “The operational and financial support that Advent provided was essential in taking Sophis to the next level. Advent’s expertise in financial services and geographical footprint were crucial, especially in navigating the global financial crisis. We are looking forward to the next phase of our activity with Misys and are excited about the tremendous opportunities that it will bring to our organisation.”
Advent International’s operational and sector focused approach as well as its international platform were instrumental to this success and attests to the strength of its investment process focused on growth in portfolio companies’ EBITDA and not solely on financial engineering. Advent International has a 25 year track record of investing in the financial services sector notably in the United States where it has been actively engaged in the derivatives trading and risk management software sector since 2001.
This transaction requires approval from Misys shareholders and is expected to be completed by the end of February 2011.
Advent International was advised by Credit Suisse (M&A), Weil Gotshal & Manges (legal), Deloitte (financial) and Taj (tax) in this transaction.
Throughout this release an exchange rate of: £1:1.16€ is used translate transaction and balance sheet values.