In the largest private takeover deal since 1989, SunGard Data Systems Inc. of Wayne, Pa., has agreed to sell itself to seven buyout firms, including Silver Lake Partners, for $10.4 billion plus assumption of debt.
SunGard also said it no longer plans spin off its disaster recovery unit, SunGard Availability Services. "This deal isn't predicated on breakups or on cutting costs," said chief executive officer Cristobal Conde in a conference call Monday. "It's all about growth."
The company's other specialty is trade processing; its programs run 70% of Nasdaq trades.
"SunGard has two good cash-generating businesses, data recovery and storage, as well as a trade-processing business," said Stephen Velgot, an analyst at Cathay Financial LLC in New York, last week.
The investor group consists of Silver Lake; Goldman Sachs Capital Partners; Blackstone Group LP; Bain Capital LLC; Kohlberg Kravis Roberts & Co.; Providence Equity Partners Inc.; and Texas Pacific Group. They said they would pay $36 a share in cash, a 44% premium to the stock's price March 21, when SunGard acknowledged that it had been approached by the private equity consortium.
The total deal value, including debt and other items, is $11.3 billion, SunGard said. The record private buyout was Kohlberg Kravis' of RJR Nabisco Inc., for $31 billion.
SunGard expects the deal to close in the third quarter.
The management team is to be retained, and Mr. Conde said he expects the buyout firms to hold on to SunGard "for a very long time."
