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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

SunGard acquired for almost $11 billion

Associated Press

PHILADELPHIA — In a move reminiscent of the blockbuster buyouts of the late 1980s, seven private investment firms said Monday they would pay almost $11 billion in cash to acquire SunGard Data Systems Inc., the financial software powerhouse known for trading services and creating backup data systems in the event of a disaster.

The deal would be the second largest leveraged buyout ever of a public company by a private investor, in dollar terms unadjusted for inflation. The all-time record is Kohlberg Kravis Roberts & Co.’s $29.4 billion purchase of RJR Nabisco in 1989, according to Thomson Financial.

Under the terms of the agreement, SunGard stockholders will receive $36 in cash for each share of Wayne, Pa.-based SunGard common stock they hold — a 14 percent premium to the company’s closing price Thursday, before the Good Friday holiday, of $31.55 per share. Some $500 million in bonds will remain outstanding.

Thomson Financial valued the deal at $10.964 billion, including outstanding shares and in-the-money stock options but excluding debt and cash on the balance sheet. In a conference call with analysts, SunGard came up with a different figure — valuing the total transaction at $11.3 billion, including common shares outstanding, stock options, debt and excluding balance-sheet cash.

SunGard shares rose $2.81, or 8.9 percent, to close at $34.36 on the New York Stock Exchange — a new 52-week high.

SunGard, which earned $454 million on revenues of $3.56 billion in 2004, provides data-handling products used by Wall Street brokers and mutual funds. The company claims that its software manages 70 percent of the transactions made on the Nasdaq Stock Market, but its biggest business is creating backup data systems in case a client’s main systems are damaged or disabled by a natural disaster, blackout or terrorist attack. Its competitors include Automatic Data Processing Inc. and DST Systems Inc.