SunGard of Wayne splits into two companies
SunGard, which built Sunoco's old computer-backup service into a global software conglomerate that stopped growing after it was purchased in 2005 by a group of buyout firms for $11.4 billion, has split into two companies, both still based in Wayne.
SunGard, which built Sunoco's old computer-backup service into a global software conglomerate that stopped growing after it was purchased in 2005 by a group of buyout firms for $11.4 billion, has split into two companies, both still based in Wayne.
Sungard Availability Services, or Sungard AS for short, is now an independent, $1.4 billion-in-yearly-sales systems-recovery and cloud-computing services company run by veteran manager Andrew A. Stern and chaired by James H. Greene Jr. of buyout firm KKR & Co. L.P., a SunGard investor.
Sungard AS says its 4,000 employees serve 7,000 clients in 11 countries, including recent expansions into India and, this week, Poland. In this area, Sungard AS includes systems-recovery and availability facilities at 401 N. Broad St. in Center City, a cloud-computing and managed-services group at 1500 Spring Garden St., and offices in Wayne and King of Prussia, among other locations.
SunGard Data Systems Inc., with $2.8 billion in yearly sales, includes the financial and trading systems the company acquired in the 1990s and 2000s, plus smaller public-school and government-services units. It has 13,000 employees serving about 16,000 customers around the world, from sites including its Wayne headquarters and offices in Voorhees.
"We are entering a new era," SunGard Data chief executive Russ Fradin said in a statement. He continues in the job, as does chairman Glenn Hutchins, a founder of buyout firm Silver Lake Partners, who has headed the board since the 2005 buyout.
"It's nice to be part of a new organization," said Keith Tilley, executive vice president at Sungard AS. "We've assumed our fair share of the debt, and the load is light. Our assets are very liquid, and there will be capital to expand in the services we need."
Tilley said that more than half the company's European revenue now comes from cloud-based and other "managed" services, while a majority of U.S. revenue is still from businesses that grew out of the original recovery service.
Even as it develops a public cloud service to help develop custom applications and other innovations, Sungard AS still supports some old-line customers that store data on magnetic tape.
"Our internal systems are in a virtual state," Tilley said, "but we give customers a range of solutions that meets their business needs."
In breaking up, SunGard is taking a route popular among mature companies when they are unable to sell business groups for high premiums.
SunGard Data and Sungard AS still are owned by the private-equity companies that bought SunGard nine years ago: Bain Capital L.L.C.; Blackstone Group L.P.; Goldman Sachs Capital Partners L.P.; KKR; Providence Equity Partners Inc.; Silver Lake; and TPG Capital L.P.
The owners had tried to sell Sungard Availability Services for a reported $2 billion before spinning off the business instead.
SunGard sold its college-systems unit in 2012 to what is now Virginia-based Ellucian for $1.8 billion and used the proceeds to pay down its debt.