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Misys seeking to grow value through flotation

Misys intends to float its IFA network businesses within two years, creating a self-contained entity comprising the five networks – Countrywide, DBS, Financial Options, IFA Network and Kestrel – and the software arm.

Misys is known as a software business. We get discounted in the market for being a conglomerate so our vision is that Misys should concentrate on its core competencies as a software company and float the life and pension business.

Our aim is to build value in the company over two years and then float the Misys IFA Services part of the company to crystallise some of that value.

Our plan to expand the business prior to flotation includes targeting bancassurers and others in the post-CP121 environment with technology solutions, end-to-end processing, compliance services, business monitoring and research capabilities. We may move into offering our own wrapper products and aggregation technology services. We will not go into manufacturing products but might start packaging them.

As yet, we have not decided how the flotation will take place or whether we will keep any shares in the new company. It could be a 100 per cent float. We want the regulatory environment to clear and equity markets to stabilise. It could be a demerger, whereby we offer shares to our existing shareholders, or it could be an open market offering. We believe that in two years time we will have built more value into the proposition through our expansion plans.

After the flotation, I have no idea what the newly floated Misys IFA Services company will be called. For the moment, the Countrywide, DBS, Financial Options, IFA Network and Kestrel names will remain for the present but they could change after CP121.

After the FSA&#39s review into depolarisation has concluded and we have a better idea of how the marketplace is likely to develop, we will look at rationalising the networks and segmenting a number of the offerings. When the new rules are implemented and we are offering IFA, multi-tie and white-label services, we will look at what existing brands would be most appropriate to what sectors.

For example, the IFA Network brand would seem more appropriate for the IFA arm. Financial Options might be a better brand for a multi-tie offering. But we have no intention to start changing the charging structures before the implementation of CP121.

We believe that Misys is a well recognised and trusted trademark in the business-to-business marketplace and, in the short term, we would want to capitalise on that.

But the high profile the float will create will create the right time to launch a new name for the new company.

Our expansion project involves increasing the size of our distribution capability. We do not comment on acquisition rumours but we will not rule out acquiring new distribution channels. But our focus is more about creating new product offerings.

We have said in our statement that IFAs will share in the benefits of the flotation. They will see a commitment from us in terms of recruitment incentives, loyalty and retirement options. Member firms will get share options at the time of the flotation although exactly how that will be worked out is yet to be determined.

DBS will remain as it is except it will come under the Mifas single management team and compliance regime, headed by Misys IFA Services chief executive officer Patrick Gale. Steve Pearson, formerly in charge of IFA Network and Financial Options, is to be appointed as DBS network director.

Assureweb will remain contained inside the newly floated business. Assureweb is a self-contained business in its own right within Misys plc and has very little dependence on the group as a whole so will not suffer from being separated from Misys itself.


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