Montagu pays £182m for MGI

The London-based private equity firm has made its second investment from its Montagu III fund with the £182m acquisition of UK finance software provider Misys General Insurance.

European mid-market private equity firm Montagu Private Equity has agreed to acquire Misys General Insurance (MGI), a subsidiary of global software company Misys, for £182 million (€260 million; $314 million).
 
Jason Gatenby, director at the London office of Montagu Private Equity, told PEO that the firm acquired MGI through Montagu III, which closed on €2.26 billion ($2.72 billion) of commitments in July last year.
 
MGI is Montagu Private Equity’s second transaction from the vehicle, which is the firm’s first independent fund since it spun out from HSBC Bank in March 2003. In December, the firm acquired Hamburg, Germany-based wound care specialist BSN medical from Smith & Nephew in a €1.03 billion deal.
 
Gatenby said that debt for the deal was provided by CIBC, but declined to comment on the debt/equity split in the funding structure.
 
The transaction is expected to complete within the next three months, subject to consent from the Financial Services Authority.
 
Gatenby said there was no auction for MGI, which Montagu had been following for some time. “We knew the target, even though it’s in a very small niche,” he said. “It’s very stable, cash generative and excellently managed. We plan no changes to MGI’s management.”
 
Founded in 1979 by Misys CEO Kevin Lomax, MGI consists of two main operating divisions: Misys Financial Services and Misys Insurance Management. The former provides hardware, software and IT services to UK general insurance intermediaries, while the latter, also known as Countrywide, is a network of independently owned insurance brokers.
 
In the year ending 31 May 2005, MGI reported EBITDA of £17.5 million on sales of £33.7 million. The business employs 300 people and is headquartered in Worcester, England.