SunGard Data Systems Inc. plans to spin off its disaster recovery business.
The Wayne, Pa., company said Monday that it expects the transaction, to be structured as a tax-free distribution of shares, to be completed by the end of March.
Cristobal Conde, SunGard's chief executive officer, said in an interview that each of the two parts of the corporation - disaster recovery and financial processing - had grown big enough to succeed as an independent company.
"We have two very different kinds of businesses, and they are heading in different directions," he said. "After the spinoff, we believe each business will be able to have a far clearer message in the market."
The disaster recovery business, SunGard Availability Services, generated about 42% of the parent's nearly $3 billion of revenue last year. SunGard roughly doubled the size of that business in the fall of 2001 by acquiring the assets of the bankrupt Comdisco Inc., which had been a big rival.
The business would retain the SunGard name. James C. Simmons, now the group chief executive officer, would become the spinoff's president and CEO.
The remaining software and transaction processing company would continue to focus on brokerage and trading systems; wealth management systems; treasury and risk management systems; investment management systems; and benefit, insurance, and investor accounting systems. SunGard says the business has 15,000 customers around the world, including the world's 50 largest financial services companies.
"We'll have to find a new name" for that business, said Mr. Conde, who would remain the CEO. It also would retain SunGard's relatively small unit that provides security and technology services to schools and governments.
