SunGard Scraps IPO Plans in Favor of $9.1 Billion Acquisition by FIS
- In a deal with an enterprise value of $9.1, FIS is acquiring SunGard, ending their previous intentions to go public as a standalone firm.
After going private in 2005 through a leveraged buyout, SunGard filed documents for a possible IPO in June. Today, it was announced that they are once again going public, but not through their own IPO as SunGard is being acquired by NYSE listed FIS in a deal with an enterprise value of $9.1 billion.
For FIS, a provider of banking and Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl solutions, SunGard brings to the table software and IT services that primarily face the trading and capital markets sector. Their offering includes solutions for post-trade reporting, asset managers, traders, energy trading and fund administration
A provider of technology solutions for the financial industry, SunGard has built a wide base of products and customer types they support. Their IT and software solutions include products for post-trade reporting, asset managers, traders, energy trading and fund administration. The added product range from SunGard is being viewed by FIS as “complementary” to their own solutions and serving similar customers.
According to FIS, following completion of the acquisition, the combined firms will have total revenues above $9.2 billion, with SunGard composing $2.8 billion. To complete the purchase, FIS will be issuing a combination of cash and stock to SunGard’s owners. In addition, FIS stated that they plan to refinance SunGard’s existing debt.
For SunGard’s owners, the $9.1 billion value represents a depreciation of their purchase price from 2005. At the time, the consortium behind the Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders buyout which included Bain Capital Partners, The Blackstone Group, Goldman Sachs & Co., Kohlberg Kravis Roberts & Co., Providence Equity Partners, Silver Lake and TPG, had paid $11.4 billion to take SunGard private. That deal was funded by around $8 billion in debt, which has since decreased to just over $4 billion. As such, despite the depreciation in SunGard’s value, the consortium should still see a return on the $3.4 billion of equity they invested; albeit minor returns.
Commenting on the deal, Gary Norcross, President and CEO of FIS stated, “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.”
After going private in 2005 through a leveraged buyout, SunGard filed documents for a possible IPO in June. Today, it was announced that they are once again going public, but not through their own IPO as SunGard is being acquired by NYSE listed FIS in a deal with an enterprise value of $9.1 billion.
For FIS, a provider of banking and Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl solutions, SunGard brings to the table software and IT services that primarily face the trading and capital markets sector. Their offering includes solutions for post-trade reporting, asset managers, traders, energy trading and fund administration
A provider of technology solutions for the financial industry, SunGard has built a wide base of products and customer types they support. Their IT and software solutions include products for post-trade reporting, asset managers, traders, energy trading and fund administration. The added product range from SunGard is being viewed by FIS as “complementary” to their own solutions and serving similar customers.
According to FIS, following completion of the acquisition, the combined firms will have total revenues above $9.2 billion, with SunGard composing $2.8 billion. To complete the purchase, FIS will be issuing a combination of cash and stock to SunGard’s owners. In addition, FIS stated that they plan to refinance SunGard’s existing debt.
For SunGard’s owners, the $9.1 billion value represents a depreciation of their purchase price from 2005. At the time, the consortium behind the Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders buyout which included Bain Capital Partners, The Blackstone Group, Goldman Sachs & Co., Kohlberg Kravis Roberts & Co., Providence Equity Partners, Silver Lake and TPG, had paid $11.4 billion to take SunGard private. That deal was funded by around $8 billion in debt, which has since decreased to just over $4 billion. As such, despite the depreciation in SunGard’s value, the consortium should still see a return on the $3.4 billion of equity they invested; albeit minor returns.
Commenting on the deal, Gary Norcross, President and CEO of FIS stated, “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.”