Provider of banking and payments technology, Fidelity National Information Services Inc. (FIS) has agreed to buy SunGard Data Systems in a deal valued at $9.1 billion, including $4 billion of debt.
According to FIS, under the terms of the deal, the company will acquire 100 per cent of the equity of SunGard and the combined company will have $9.2 billion in annual revenue, over 55,000 employees and will serve thousands of clients in over 100 countries.
The deal ends plans by SunGard owners, to sell the company publically and is the biggest deal SunGard has gone through since a group of private-equity firms acquired the financial software company ten years ago, the Wall Street Journal reports.
“This is a significant milestone for FIS,” said Gary Norcross, president and chief executive officer, FIS. “By bringing together two innovative companies with common business models, similar cultures, strong leadership and complementary solutions, we are enhancing our ability to empower our clients and deepen client relationships through an expanded full-service offering. Our focus has always been on championing the needs of our clients and we are excited about the opportunities this combination provides to further deliver on that commitment.”
SunGard provides software to thousands of banks, asset managers, private-equity firms and insurance firms in the areas of trading, risk and asset management and according to the Wall Street Journal, SunGard has struggled over the years with the ever-changing technology landscape, billions of dollars in buyout debt, and the added challenge of the company’s seven backers agreeing over shared control.
In 2005, KKR &Co., Blackstone Group, Silver Lake, Bain Capital, TPG, Providence Equity Partners and an arm of Goldman Sachs Group paid $11.4 billion for SunGard. The deal, which helped to initiate a variety of large buyouts, also resulted in an accumulation of debt over the years because the group bought companies with financial help and many of the companies that were bought, struggled financially during the recession.
Conditions during the financial crisis also added pressure, as SunGards biggest clients, banks, took a big hit and meant that SunGard’s private equity owners had to keep control of the company past their usual five-year holding period.
Commenting on the deal, Russ Fradin, SunGard president and chief executive officer said, “Our focus has always been on delivering more value to our clients and making decisions that achieve our growth and performance objectives. We are proud to become part of one of the financial services industry’s most respected and solidly performing companies. We embrace this transaction and believe it is the best outcome for our employees and the clients we are dedicated to serving.”