SunGard to be sold for $11.3bn

SunGard to be sold for $11.3bn

SunGard Data Systems has confirmed that it will be acquired by a consortium of seven private investment firms in a deal worth $11.3bn.

The deal is the largest-ever buyout of a technology firm.

The consortium is led by Silver Lake Partners and includes Bain Capital, Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co, Providence Equity Partners and Texas Pacific Group.

Under the terms of the agreement, the group will pay $36 per share - or $10.8 billion - in cash and assume $500 million of debt. The cash-for-stock part of the deal is a 14% premium over the vendor's closing price of $31.55 per share last Thursday. SunGard says the total value of the acquisition, including debt and other items, is $11.3 billion.

The transaction will be financed through a combination of equity contributed by each of the consortium partners and debt financing provided by JPMorgan, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs and Morgan Stanley.

Cristóbal Conde, president and CEO, SunGard, says the new investors "have a long-term view towards growing the businesses". He told reporters that the firm's buyers were not planning major job cuts or asset sales as part of the deal.

In a statement, SunGard says in light of the transaction it will cancel plans to spin-off its availability services business. The firm's current senior management team will continue to lead the company, with corporate headquarters remaining in Pennsylvania.

The deal has been approved by SunGard's board of directors and is expected to be completed in the third quarter.

SunGard stock rose 8.9% yesterday on the news to close at $34.36, which is over 30% higher than the firm's share price on March 21st when the vendor first confirmed it had been approached by the buy out funds.

Comments: (0)