Private Equity Group to Buy SunGard for $11.3B

By Brian Fonseca  |  Posted 2005-03-28 Print this article Print

SunGard stockholders will receive $36 in cash for each share of common stock they hold; SunGard officials say plans in the works to form a spinoff of the company's Availability Services business unit have been called off.

SunGard Data Systems Inc., a maker of business continuity and processing software heavily focused on the financial services arena, announced Monday that it has entered into an agreement to be acquired by seven private equity investment firms in a transaction worth about $11.3 billion. Organized and led by Silver Lake Partners, the consortium set to acquire SunGard also includes Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. L.P., Providence Equity Partners and Texas Pacific Group, according to officials of Wayne, Pa.-based SunGard.
SunGard stockholders will receive $36 in cash for each share of SunGard common stock they currently hold, according to the terms of the agreement.
In addition, $500 million of SunGards existing bond will remain outstanding. The transaction is expected to be completed in Q3 2005. SunGards Board of Directors has already signed off on the deal and will recommend that stockholders follow suit. Plans in the works by SunGard to form a spinoff of its successful SunGard Availability Services business unit into a standalone public company have been called off as part of the proposed acquisition, said officials. To read more about how the SunGard acquisition plays a part in a recent trend, click here. At the time of the spinoff announcement made last October, SunGard said the move was designed to split up SunGards Software and Processing Solutions business and Availability Services—featuring managed hosting, disaster recovery, storage and records management capabilities—to enable a shift from a reactive disaster recovery stance to a proactive business continuity consulting mode of operations. Read more here about SunGards plans to form a spinoff of its Availability Services business unit. A spokesman for SunGard Availability Services would not say whether the $11.3 billion purchase offer hinged on keeping Availability Services underneath the SunGard Data Systems umbrella. The existing Availability Services management team and strategy will remain in place and will be unaffected by the private equity group purchase. The acquisition of SunGard stands as the largest buyout of a public company since 1989, when Kohlberg Kravis Roberts purchased RJR Nabisco for $25 billion. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.
Brian Fonseca is a senior writer at eWEEK who covers database, data management and storage management software, as well as storage hardware. He works out of eWEEK's Woburn, Mass., office. Prior to joining eWEEK, Brian spent four years at InfoWorld as the publication's security reporter. He also covered services, and systems management. Before becoming an IT journalist, Brian worked as a beat reporter for The Herald News in Fall River, Mass., and cut his teeth in the news business as a sports and news producer for Channel 12-WPRI/Fox 64-WNAC in Providence, RI. Brian holds a B.A. in Communications from the University of Massachusetts Amherst.

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