SunGard has agreed to allow a consortium of private equity investment companies organized by Silver Lake Partners to take the public company private in a transaction worth about $11.3 billion.
The plan puts an end to SunGard's intentions, announced in October 2004, to spin off SunGard Availability Services, its disaster recovery services business (see SunGard Spins Off DR Biz). Availability runs as a separate entity within SunGard, and in 2004 it accounted for about one third of the company's $3.5 billion in worldwide revenues. Availability has long been the focus of industry rumors, including the chance it might be sold to a big supplier before SunGard spun it off.
For now, all bets are off. "It's business as usual in every regard," said SunGard CEO Cristbal Conde in a conference call with analysts today. "We believe the investors intend to hang onto SunGard as one piece for a very long time."
There will be no executive changes or employee cuts, he says. SunGard Availability will continue to be headed up by group CEO James C. Simmons from its headquarters in Wayne, Pa., and its 2,000 or so employees will continue unchallenged in what SunGard claims are services to over 1,000 clients worldwide.