Sherwood agrees £65.1 million SunGard offer
10 July 2003 | 4443 views | 0
SunGard Data Systems is to acquire UK insurance systems outfit Sherwood International for £65.1 million cash.
The agreed 140 pence per share offer for Sherwood, made by Citigroup Global Markets on behalf of SunGard Insurance Services Limited, represents a ten per cent premium to Sherwood's closing price of 127.5 pence.
SunGard says the acquisition will strengthen the firm's current IT services business in the United Kingdom and Europe.
Cris Conde, chief executive officer of SunGard, states: "Combining Sherwood with SunGard's existing insurance systems business will strengthen our global capability for these systems. It will also allow us to provide customers with an enhanced range of insurance and benefits products."
SunGard's offer comes two months after Sherwood announced it was exploring a 110 pence per share private equity deal.
Ken Andrew, Sherwood chairman, says the SunGard offer "will allow Sherwood to be better able to build greater scale, achieve its growth aspirations and enhance its global offering as part of a much larger entity".
Sherwood was established in 1970 and is a leading supplier of software and services to the global insurance industry and the UK Government.
For the financial year ended 31 December, 2002, Sherwood recorded sales of £52.2 million (2001: £56.5 million) and an operating profit before exceptional items of £4.6 million (2001: £0.2 million). Sherwood had net assets of approximately £34.1 million as at 31 December, 2002.
In its latest update, the firm warned that the difficult trading environment and uncertainty over Sherwood's future ownership meant that some customers were deferring decisions on key software licence sales and that this has adversely impacted the firm's revenues, net assets and cash position for the half-year to 30 June, 2003.