Fidelity National Information Services (FIS) said Wednesday it had agreed to acquire financial software vendor SunGard in a deal valued at $9.1 billion that ends plans by SunGard’s private-equity owners to take it public.
With the sale, The Wall Street Journal reported, the seven private-equity firms that bought SunGard in 2005 have made a return of a little more than 1.5 times the cash they invested. The acquisition was one of the signature deals of the buyout boom that preceded the financial crisis.
“The private-equity firms are trading the uncertain outcome of an IPO for a modest profit that could grow over time depending on the performance of Fidelity National’s shares,” the WSJ said.
The sale to FIS includes $2.3 billion in cash, $2.8 billion of FIS shares, and the assumption of SunGard debt.
SunGard provides software solutions for financial services, the public sector, and education, while FIS supplies banking and payments technology and services. The combined company would have over $9.2 billion in annual revenues and more than 55,000 employees, and it would support thousands of clients in over 100 countries worldwide.
“This is a significant milestone for FIS,” Gary Norcross, the company’s CEO, said in a news release. “We are enhancing our ability to empower our clients and deepen client relationships through an expanded full-service offering.”
The private-equity consortium acquired SunGard for $11.4 billion, pooling $3.5 billion of their investors’ cash and borrowing the rest.
“Beyond the company’s struggles under the burden of billions of dollars in buyout debt and [an] ever-changing technology landscape, SunGard’s seven backers over the years grappled with the challenges of sharing control of the company,” the WSJ said.
SunGard had filed in June for an initial public offering as a way to pay off $4.67 billion of debt. FIS said it expected to refinance the debt.
FIS shares were up more than 7%, at $70.05, in trading Wednesday.