Payment-services provider Fidelity National Information Services Inc. is in exclusive talks to acquire Wayne-based SunGard Data Systems Inc. for more than $8.3 billion, according to people familiar with the matter.
Though a deal is not imminent, Fidelity would pay with a mix of cash and stock if a transaction occurred, said the sources, who asked not to be identified because the discussions are private. The split would be about 50 percent cash and 50 percent stock, one person said.
SunGard, which makes software for financial institutions, is owned by seven private-equity firms, including Silver Lake Management, Providence Equity Partners, and KKR & Co. It filed for an initial public offering in June.
Shares in Jacksonville, Fla.-based Fidelity National climbed 4.13 percent, or $2.61, Thursday, closing at $65.85 on the New York Stock Exchange.
Representatives for Fidelity National and for SunGard co-owners Bain Capital, Providence, Silver Lake and TPG Capital declined to comment. Representatives for Blackstone Group L.P. and KKR were not immediately able to comment, while officials at Goldman Sachs Group Inc. didn't immediately respond to requests for comment.
SunGard was acquired by the private-equity firms for about $11 billion in 2005, when leveraged buyouts by large groups of investors were more popular. The firms held on to SunGard through the financial crisis to allow banks, which use its financial services, to recover.
In announcing its intent to go public, SunGard said in June that it planned to use money obtained in the IPO to pay down some of its $4.7 billion in debt. SunGard said its financial, commodity, compliance, and trading software and servicing operations are used by at least 40 of the 50 largest banks, investment managers, and insurers in the world, and all 10 of the largest private-equity firms.
In documents filed with the Securities and Exchange Commission, SunGard, which employs 13,000 worldwide, said it lost $396 million on sales of $2.8 billion last year, and had lost money in every year from 2010 to 2014.
Last year, SunGard split off its SunGard Availability Services unit - the company's original computer-backup business, developed by Sunoco in the early 1980s - after it failed to find a buyer amid stiff competition from cloud-based services.
On Thursday, SunGard Data Systems reported second-quarter revenue of $687 million, up 2 percent year over year (up 6 percent adjusting for currency). Operating income was $108 million, and the operating income margin was 15.9 percent in the quarter.
Operating income increased 43 percent year over year, SunGard reported, and the operating income margin increased 4.5 points year over year, driven by the increase in revenue, and a 3 percent decrease in total costs and expenses. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $178 million, up 12 percent year over year, and the adjusted EBITDA margin was 26.0 percent, up 2.3 points year over year.
In a statement accompanying the quarterly report, Russ Fradin, president and chief executive officer, said, "Our second-quarter performance reflects the continued transformation of SunGard and demonstrates the progress we're making in improving the business. Clients and prospects are embracing the new products and services that we've brought to market, clearly demonstrating that we are on the right track and validating the development, sales and delivery investments that we've been making."