Misys, the UK-based software company whose new management is refocusing its business through a series of disposals and acquisitions, has acquired IQ Financial Systems (IQFS) from Deutsche Bank for $40 million in cash.
Misys says the acquisition extends its penetration of the commercial lending segment of the banking software market via IQFS’s LOAN IQ product. LOAN IQ is aimed at top tier global banks and corporates, and seeks to provide its users with a comprehensive software solution that manages the entire lifecycle of a loan from origination and deal tracking to administration and record maintenance.
IQFS is headquartered in New York and currently serves 29 clients predominantly in North America. Misys expects to build upon IQFS’s existing strong position in the North American market whilst achieving further penetration into the European and Asia Pacific markets. The purchase price was funded from Misys’ existing resources.
“This acquisition is directly in line with our strategy to build market-leading businesses in larger, faster-growing sectors within the banking software markets,” says Ivan Martin, CEO of Misys Banking and Securities Division. “The global commercial loan systems market is a large and attractive market. This is a market that is under-penetrated and we believe the acquisition of LOAN IQ in concert with our distribution capabilities provides a great opportunity to significantly extend the scope of our business.”
IQFS will be integrated into Misys Wholesale Banking Systems. The CEO and President of IQFS Edward Ho will be among more than 100 staff transferring to Misys. In the year ending 31 December 2003 IQFS recorded revenues using Misys GAAP of some $22m. In the first year of ownership Misys expects IQFS to achieve revenue growth and make a positive EBIT contribution to the group (pre goodwill amortisation arising from acquisition) after allowing for significant integration costs.
“Our products are proven, with organisations being able to eliminate as much as 30-50% of their loan origination and servicing costs through the reduction of front, middle and most of the back-office operational support functions,” says Edward Ho. “The loan syndication market is a truly worldwide market and we see real benefit now that we are part of a global software products group. Misys is a firmly established market leader in developing financial software solutions and will provide us with a platform for growth.”