New SunGard Higher Ed owner weighs cuts

Hellman & Friedman LLC, San Francisco, says it's finished acquiring the SunGard Higher Education unit of Wayne-based SunGard Data Systems, for $1.775 billion, and merging it into Fairfax, Va.-based Datatel. The combined business will becalled Datatel+SGHE, for now, until the owners come up with a new name, Datatel boss John Speer, who will head the combined firms, said in this statement. Former SunGard Higher Ed boss Ron Lang was named vice chairman of the board.

SunGard will use the sale proceeds "to pay down debt," spokesman George Thomas told me.

Datatel+SGHE sells Advance, Banner, Colleague, and PowerCampus software, in competition with products made by Oracle and proprietary and start-up rival systems.

Datatel+SGHE employs 3,000 and sells into 40 countries from sites including an office in Malvern. What happens to those workers? "It is fair to say that there will be some roles in the combined company that will be redundant," spokeswoman Laura Kvinge told me. "Our goal is to minimize the number of job reductions" through attrition and transfers, as the company seeks to expand "globally," Kvinge added.

Parent SunGard Data, spun off by Sunoco in the early 1980s, was bought by Silver Lake Partners and other big private investment firms for $11.3 billion in 2005. Under pressure to show returns for that investment, the company has also reviewed buyers for its remaining businesses, which include SunGard Availabililty (data backup and security), SunGard Financial (trading and financial systems) and a government-services unit.

Posted by Joseph N. DiStefano @ 12:24 PM Permalink | 1 comment

Comments

0 like this / 0 don't • Posted 1:17 PM, 01/23/2012

What a sad story SDS turned out to be. SL bought them for a price that was probably twice of what they should've paid for SDS. Prior to the LBO SDS had 600 million cash in the bank. Now its so leveraged that the new owners embarrasment of such a lousy LBO in the tech and PE worlds has them scrambling to save face. Now SL is selling off business units and cutting staff. So much for having a Harvard education.

— DoodieMangler

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About Joseph N. DiStefano

Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com