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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.
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.
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.