SunGard Draws $10 Billion In Leveraged Buyout Talks
March 28, 2005
A private equity consortium led by Silver Lake Partners is in talks to buy SunGard Data Systems for as much as $10 billion, a move that would mark one of the biggest leveraged buyouts since the RJR Nabisco takeover, it was reported last week.
The group, which includes buyout heavyweights Texas Pacific Group and Thomas H. Lee Partners, has been engaged in serious discussions with SunGard for the past few weeks about buying the software and processing-services provider and taking it private. The proposed leveraged buyout of the company would likely require the big investors to commit as much as $3 billion to $4 billion in equity, with the remaining portion of the acquisition financed with debt.
In a release posted on its Web site, the company said: "SunGard does not intend to comment on any specific discussions or any potential transaction unless and until it enters into a definitive agreement."
The takeover chatter comes on the heels of SunGard's announced spin-off of its disaster-recovery business in October. The unit, which has grown exponentially since the Sept. 11 terrorist attacks, accounted for 34% of the company's total revenue last year.
Credit Suisse First Boston and Shearman & Sterling, which had already been retained in connection with the spin-off, are serving as advisors in the negotiation process.