Today in Philly Tech History March 28, 2005: Wayne-based SunGard Data Systems agrees to $11.3 billion LBO

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On March 28, 2005, Wayne-based SunGard Data Systems agreed to be taken private in an $11.3 billion leveraged buyout, the second largest of all time at that point. The deal, organized by Silver Lake Partners (Michael Dell's partner in the proposed Dell buyout currently under consideration), included a consortium of seven companies, including Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners and Texas Pacific Group in addition to Silver Lake.

Although LBOs are often done on the basis of cash flow, rather than growth prospects, SunGard's growth since going private has likely been a disappointment to its investors. Each of its principal business segments saw flattening growth; SunGard Financial Systems was negatively impacted by the problems in the financial sector the past few years. SunGard Higher Ed, which also saw diminished growth, was sold in 2011 for $1.775 billion and merged with competitor Datatel. The combined company was renamed Ellucian. Plans to take SunGard Availability Services public have surfaced periodically but never progressed. Its business has not been growing despite areas of potential as a cloud computing provider.

The SunGard LBO was among the deals included in a lawsuit filed last year alleging that major PE firms conspired with each other to hold down bidding competition on target companies.




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