SunGard to spin off availability services business
04 October 2004 | 5397 views | 0
SunGard is to spin off its availability services business into a separate publicly traded company through a tax-free distribution of shares, which is expected to be completed in the first quarter of 2005.
In a statement the vendor says the spin-off of the business, which provides disaster recovery services, will not result in any job losses.
SunGard Availability Services, which will retain the SunGard name, reported revenues of $1.2 billion and operating income of $340 million for the full-year 2003. The unit generated 40% of SunGard's full-year 2003 revenues, while the vendor's software and processing business generated the other 60%.
Cristobal Conde, SunGard's president and CEO, says the two businesses, which were brought together in the leveraged buy-out that created SunGard in 1983, have remained discrete, with separate sales forces, different types of customers and limited operating overlap.
"After the spin-off, each company will be better able to pursue growth strategies that are tailored to its business segments," says Conde.
James Simmons, currently group CEO of SunGard Availability Services, will become president and CEO of the spin off firm, while Michael Ruane, currently CFO of SunGard, will become CFO of the spun-off company. Andrew Bronstein, currently vice president and controller of SunGard, will succeed Ruane as CFO, SunGard.
James Mann, chairman of the board of directors of SunGard, will become chairman of the board of directors of the spun-off company, while remaining a director of SunGard for a transitional period.