(Update) Report: SunGard Availability Services up for sale?
Tom Paine
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A story from Reuters suggests that Wayne-based SunGard Data Systems is looking to sell all or part of its $1.4 billion (revenue) SunGard Availability unit. The story is, in fact, confusing and not precise regarding whether SunGard would sell all of SunGard Availability or only the "Managed Servics" portion of it.
Reuters cites sources as saying the sale could raise up to $2 billion, ten times the unit's (to be sold) earnings before interest, tax, depreciation and amortization (EBITDA) of around $200 million.
SunGard Data Systems was taken private in a $11.4 billion leveraged buyout (LBO) in 2005.
SunGard Data Systems sold its Malvern-based SunGard Higher Education unit to Datatel (now Ellucian) for $1.7 billion in early 2012. SunGard Data Systems' largest remaining unit is SunGard Financial Systems, which accounted for 62% of its $4.3 billion in revenue in 2012. SunGard Fnancial, which is run out of New York, is a powerful force in the banking & finance industries, but it also has not grown much recently due to the financial crisis and other factors.
There had been talk in recent years (fueled by the company itself at times) of spinning off SunGard Availability in an IPO, but the unit has probably not shown enough growth momentum to make such an offering attractive. SunGard Availability's overall revenue has been essentially flat over the past several years, although some areas of the business are
growing while others are declining. SunGard Availability is based in Wayne, and has major data center operations in (the city of) Philadelphia and many other locations in North America and Europe. It provides disaster recovery and business continuity services, as well as cloud hosting services.
SunGard has not commented on the Reuters story.
