SunGard

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SunGard Data Systems
Type Private
Industry Information Technology
Founded 1983
Headquarters Wayne, Pennsylvania, USA
Key people Russ Fradin
(CEO)
Products Computer software
Support services
Revenue Decrease $ 4.991 Billion (2011)
Owner(s) Silver Lake Partners,
Bain Capital,
Blackstone Group,
Goldman Sachs Capital Partners,
Kohlberg Kravis Roberts,
TPG Capital
and Providence Equity Partners
Employees 17000 (2011)
Website sungard.com

SunGard is an American multinational company based in Wayne, Pennsylvania, which provides software and services to education, financial services, and public sector organizations. It was formed in 1983, as a spin-off of the computer services division of Sun Oil Company. The name of the company originally was an initialism which stood for Sun Guaranteed Access to Recovered Data, a reference to the disaster recovery business it helped pioneer. SunGard is ranked at 480th in the U.S. Fortune 500 list in the year 2012.[1] SunGard was one of the title sponsors of the Team Tinkoff-Saxo pro cycling team until the end of 2011.[2]

Business

SunGard provides software and processing for financial services, K-12 and Higher Education, and the public sector. It also provides continuity-assurance and production data center hosting services to enterprises of all types. SunGard has offices in many parts of the world outside of the United States including Paris, Tunis, Stockholm, and the United Kingdom.[citation needed]

Acquisitions

SunGard has historically grown by acquisition. Past mergers include Performance Pathways, Vericenter, InFlow, Strohl Systems, Comdisco Continuity Services, and Guardian iT PLC on the availability side, Systems & Computer Technology Corp. (SCT) on the higher education side, and GL Trade, Oshap (Mint, Decalog), TRAX, Carnot AG, Front Capital Systems (Front Arena), Martini, Monis, APT, Dyatron, Reech, VPM, Phase 3 Systems, Infinity, Microhedge, Reconciliation, Automated Securities Clearance India, Opus Renaissance Software Inc., and National Computer Systems Financial Systems Division on the (primarily financial) software and processing side. SunGard has completed more than 150 acquisitions over the past 20 years.

The five large and most prominent acquisitions were:

  • In 1997, SunGard Data Systems acquired Infinity Financial Technology, a designer of trading and risk-management software, for about USD 390 million, where USD 313 million were paid in stock and USD 77 million went in cash.[3] Infinity Financial Technology reported revenues of about USD 60 million in the fiscal year 1996.
  • in 1999, SunGard acquired Israel's Oshap Technologies (Nasdaq:OSHSF) for $210m in stock, giving SunGard a foothold in both the middleware (via Oshap's subsidiary Mint Communications) and front-office portfolio management systems markets (via Oshap's subsidiary Decalog).[4]
  • In 2001, SunGard acquired Comdisco Inc.’s computer disaster-recovery business after a U.S. appeals court rebuffed a request by the Justice Department to halt the $825 million transaction.[5]
  • In 2004, SunGard acquired Systems & Computer Technology Corp. (SCT) for $590 million in cash.[6]
  • In 2008, SunGard acquired GL Trade, a Paris-based financial services firm for nearly USD 1 Billion; in a first tranche a 65% stake in GL Trade was acquired for USD 625 Million, including effect of outstanding stock options.[7] The deal encompasses the NYSE Euronext's 40% stake in GL Trade, however 25,4% were in the hand of the founders and 36,6% of the shares were free float. The deal was considered to be financially hazardous, given the mere fact that GL Trade reported revenues of EUR 203 million and an EBITDA of EUR 26 million (fiscal year 2007).
  • In 2008, SunGard acquired Strohl Systems, an IT company, direct competitor of SunGard in availability and recovery planning. Strohl Systems became software division of SunGard Availability Services, located in King Of Prussia, PA

De-Merger Activities

In August 2011 Datatel and SunGard's Higher Education group announced the definitive agreement to combine businesses and operate as one company. Datatel’s current chief executive officer, John Speer, will be the chief executive officer of the combined business. Ron Lang, the CEO of SunGard Higher Education, will continue to play an active role in the combined business as vice chairman of the board of directors.

Affiliates of private equity firm Hellman & Friedman LLC will acquire the SunGard Higher Education businesses from SunGard Data Systems Inc. for an aggregate cash purchase price of USD 1.775 billion and combine the acquired businesses. The combined company will operate under a new name, Ellucian, as announced at the 2012 annual users' conference.

On 7 December Hellman & Friedman, Datatel and SunGard announced that the proposed combination of Datatel and SunGard Higher Education had cleared Department of Justice review and the companies are preparing to close the transaction in the first quarter of 2012.[8] In March 2012, the combination was announced, with the new company being called Ellucian.[9]

SunGard's total debt of USD 8.08 billion will be alleviated by selling the Higher Education business line, however a projected annual revenue shortage of USD 580 million can be assumed, resulting in a total revenue projection for the fiscal 2011 of USD 4.7 billion insinuating a negative revenue trend.[10]

In December 2010, The Capita Group Plc acquired SunGard Public Sector Holdings Ltd (A UK Public Sector business) for £86 million.[11] The new business was known as Capita Secure Information Systems; it has now been renamed Capita Secure Managed Services.[12]

Leveraged Buyout 2005

Formerly listed on the NYSE (ticker symbol SDS) on August 11, 2005 the company was acquired by a consortium of seven private equity investment firms in a transaction valued at $11.3 billion. The partners in the acquisition were Silver Lake Partners, Bain Capital, Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners, and TPG Capital.[13]

References

  1. ↑ "Fortune 500 2012: Fortune 1000 Companies 401-500". CNN. 
  2. ↑ "Nyheder fra". Borsen.dk. Retrieved 2012-03-29. 
  3. ↑ "SunGard Data to acquire Infinity Financial". The New York Times. 1997-10-18. Retrieved 2008-02-04. 
  4. ↑ "SunGard buys Israel’s Oshap". Financial News. 15 Mar 1999. 
  5. ↑ Schoenberg, Tom (2011-08-31). "AT&T Suit Follows Antitrust Tactics With Oracle, H&R Block". Bloomberg. 
  6. ↑ "SunGard completes SCT acquisition". bizjournals.com. 2004-02-12. Retrieved 2012-01-23. 
  7. ↑ "SunGard Completes Acquisition of Majority Interest in GL Trade". www.sungard.com. 2008-10-01. Retrieved 2011-09-01. 
  8. ↑ "Datatel and SunGard Higher Education Combination Clears Regulatory Review". www.sungard.com. 2011-12-07. Retrieved 2011-12-11. 
  9. ↑ "Ellucian: New Company Name Announced for Datatel and SunGard Higher Education Combination". Business Wire. March 26, 2012. Retrieved 20 April 2012. 
  10. ↑ "SunGard Announces Second Quarter 2011 Results". www.sungard.com. 2011-07-28. Retrieved 2011-09-01. 
  11. ↑ "Capita acquires SunGard Public Sector Ltd". www.capita.co.uk. 2010-12-23. Retrieved 2012-02-14. 
  12. ↑ Capita Secure Information Solutions Website
  13. ↑ "SunGard bought by group for $11.3 billion". www.nytimes.com. 2005-03-29. Retrieved 2012-01-03. 

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