Misys was a perennially frustrating software company for a long time. Founded in the 70s, it acquired leadership positions in healthcare and banking IT – but by the 1990s it was running out of steam. It failed to get growth out of its verticals, and never seemed as interesting as other IT stocks during the technology boom.
Too many acquisitions may have been its biggest problem. Misys never integrated the different bits of software that it acquired; its different packages drifted further and further out of contention. The amount of R&D required to bring them all up to date with browser based functionality, workflow and process management, and open platforms would have been prohibitive.
Much of the product portfolio was beginning to look dated – and growth was unexciting for Misys' 'universal banking' systems, compared to sub-sectors such as derivatives, trading platforms, workflow, or banking CRM. The company had become unwieldy – too big to achieve significant growth – and the shares languished.
By 2006 the situation had become intolerable. Many analysts were suggesting the company would be worth more as the sum of its parts than it was on the stock exchange [1] . Founder and CEO Kevin Lomax tried in 2006 to take the company private with an MBO – but failed, and left the company.
Mike Lawrie, a former IBM manager who had failed to turn around CRM supplier Siebel Systems, took over in October 2006, with an unusual pay package – the options only pay out if he gets the share price to 400p, double what it was when he joined the company.
The easy job was to get rid of diversions. The Sesame IFA network was sold to £FP in May 2007, and a number of non-core health products were also sold off.
More imaginative was the transformation of the healthcare business. It had been too small to be effective in the US; in March 2008, it was merged with its major competitor, Allscripts. Misys now holds a 54% stake in the NASDAQ traded Allscripts-Misys Healthcare, the leader in the US health market. This has enabled the group to gain substantial cost savings, as well as improving its marketing ability [2] .
Misys also refocused its sales effort. Banks in the US and Europe are not growing fast, if at all, so…
