SunGard, the Sunoco spinoff that built a Philadelphia-area computer-data remote-backup service into a global financial-schools-government-data security empire before its $11.4 billion 2005 purchase by private-equity firms was followed by flat-lined revenues and profits, has completed its planned separation into two companies, both still based in Wayne, Pa.:
Sungard Availability Services (Sungard AS) is now an independent $1.4 billion (yearly sales) group run by Andrew A. Stern, who in a statement called himself "very excited about the prospects to accelerate our growth." He also rolled out a new logo, a "forward-looking angle" that "conveys progression and growth," on a triangle for "stability and support." Sungard AS claims 7,000 cloud, managed-hosting and recovery-services clients in 11 countries, served by about 4,000 employees.
SunGard Data Systems Inc. remains as the $2.8 billion (yearly sales) rump of the larger company. It still includes the financial and trading systems business the company grew in the 1990s and 2000s through multinational acquisitions, plus smaller public-school and government-services units, serving a total of around 16,000 customers in 17 countries, and 13,000 employees, under continuing CEO Russ Fradin. "We are entering a new era," Fradin said in a statement.
In breaking up, SunGard, a mature software company, is taking a route popular among diversified manufacturers when they are unable to sell business groups for high premiums. Tyco International, based near Princeton, NJ, has spun off a series of multinational business groups in recent years, including Berwyn-based TE Connectivity, claiming strong results for public shareholders. Specialty-chemicals maker FMC Corp. of Philadelphia, which split off its FMC Technologies oil-services group in 2000, plans to split off FMC Minerals later this year. DuPont Co. has also engineered a series ofspinoffs and asset sales. So has Blue Bell computing pioneer Unisys.
SunGard Data and Sungard AS are co-owned by the private-equity companies that bought SunGard nine years ago: Bain Capital LLC, Blackstone Group LP, Goldman Sachs Capital Partners LP, KKR & Co LP, Providence Equity Partners Inc., Silver Lake, and TPG Capital LP. The owners had tried to sell Sungard Availabilty for a reported $2 billion before spinning off the business instead.
SunGard sold its college systems unit to what's now Virginia-based Ellucian for $1.8 billion in 2012, and has been paying down debt and projecting dividends to its private-equity owners. The firms previously had little to show for their nine-year investment, which has been marked by slow growth and contraction and layoffs in some business lines, intermittent new investments mixed with the continued use of computer tape and other old technologies, and attempts to guide other firms controlled by the private-equity owners to use SunGard-related services.