After selling or splitting off pieces of the company, the big private-equity firms that own Wayne software and services provider SunGard say they're planning to take the company's remaining financial, commodity, compliance and trading software businesses public again. Suggested price not yet stated. Proceeds to be used to pay down the company's debt.
While it claims more than 40 of the 50 largest world banks, investment managers and insurers and all 10 of the largest private equity firms are customers, SunGard says it lost $396 million on sales of $2.8 billion last year, and lost money in every year 2010-14.
The company faces relatively high payments on its $4.7 billion in debt. SunGard claims customers in more than 100 countries (though 64% of revenues are in North America) and 13,000 employees, including 500 "global quota carrying salespeople" and more than 4,700 development staff. Cheif executive Russell P. Fradin collected $6.8 million in salary, bonus and stock grants last year, down from $13.4 million in 2013. Read SunGard's new SEC public offering filing here.
As I noted here last month: Blackstone, Goldman Sachs, KKR, Silver Lake, Providence Equity, Bain and the other private equity companies that bought Wayne-based corporate software maker SunGard in 2005 for $11.4 billion, largely in borrowed money, and hope to value what's left at $7 billion, the Wall St. Journal reported.
In 2014, SunGard said it would split off its Sungard Availability Services (AS) unit -- the company's original computer backup business, developed by Sunoco in the early 1980s -- in what it hopes (but still isn't sure) the government will agree is a tax-free transaction, after it failed to find a buyer amid stiff competition from cloud-based services. Two years earlier, the owners sold company's college software business to what's now Ellucian, grossing $1.8 billion on the deal; that sale and another unit sale that year left a net $571 million gain, the company says.
SunGard paid stock investors a dividend of $724 million in 2012, has since paid out just $5 million, and has no plans for more stock dividends "in the forseeable future."
SunGard has lately reported increased sales and operating earnings. But the company has generally suffered slow growth under its private-equity owners, who expected dividends at a time when rival software firms were investing heavily in cloud-based services and marketing. An early post-LBO strategy to boost sales by selling to the firms' other companies fell short.