Thursday, 3 July 2008

Financial Objects - Another one hits the dust

Financial Objects (FO) has become the latest in a long string of small/mid-sized UK SITS companies to succumb to a bid approach. Temenos has bid 60p (a massive 90% premium to last night’s closing price) which values FO at £27.2m. FO had revenues of £21.23m and PBT of £2.75m in FY2007. FO provides software solutions and services for banking and financial services, energy companies, property asset management and document management. They have around 500 customers including Abbey, Wachovia, Aegon, BAA, Bradford and Bingley.

My involvement with FO goes back to its formation in 1995 by Roger Foster (then of ACT fame). They floated in Nov 98 with a £82m valuation and a share price of 230p – so the ‘takeout’ price is a mere fraction of that! But that was as nothing compared with the 790p price that FO hit in those crazy days of early 2000. Although quite what FO had to do with the internet was a bit beyond me even then. Roger Foster has since stepped down and new CEO, Karim Peermohamed, who I have also got to know, has done a very good job since. Indeed, I’m sure FO’s shareholders will raise a glass to him for executing this deal

Temenos’ main competitor is Misys. It will be interesting to see how far consolidation in this sector goes…

No comments: