SunGard splits in two
SunGard, the financial technology giant that grew through a continual stream of acquisitions a decade ago, has now split into two companies. SunGard Availability Services, which does $1.4 billion in yearly sales, is now independent from larger unit SunGard Data System Inc., which does $2.8 billion in yearly sales.
Forbes reports that disaster recovery/availability services are increasingly essential but less differentiated, putting pressure on providers to innovate through cloud services and other new technologies. This need to be more nimble may have been a contributing factor in the separation of the businesses.
"Now that we are an independent firm, we have the flexibility to evolve our culture, our industry relationships and our investments to maximize our business and best serve customers," said Andrew A. Stern, CEO of SunGard Availability.
The private equity firms that co-own SunGard tried to sell SunGard Availability for $2 billion this summer before splitting it off, Reuters reported at the time.
Both SunGard Data and SunGard Availability are owned by a group of private equity firms that purchased the combined company for $11.4 billion in 2005. The owners include Bain Capital LLC, Blackstone Group LP, Goldman Sachs Capital Partners LP, KKR Co. LP, Providence Equity Partners Inc., Silver Lake and TPG Capital LP.
Revenues for the overall company were flat last year. The Philadelphia Inquirer reports that the investors initially had little to show for their investment, as the company had a period of slow growth and some contraction and layoffs. The company had been paying down debt and paid its first dividends in 2012. Also that year it sold its college systems unit for $1.8 billion to Virginia-based Ellucian.
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- read the Forbes article
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