A group of seven private equity investment firms agreed to buy back-office software provider SunGard Data Systems Inc. on Monday in a deal the group valued at $11.3 billion. The acquisition marks the largest leveraged buyout of a public company since Kohlberg Kravis Roberts & Co. bought RJR Nabisco for $25 billion in 1989.
The private equity group is headed by Silver Lake Partners and includes Bain Capital, the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners and Texas Pacific Group.
The group is buying SunGard for $36 a share in cash, a 14% premium to its closing share price of $31.55 on Thursday on the New York Stock Exchange. The investor group will also acquire $500 million of SunGard bond debt, which will remain outstanding.
"This transaction offers great value to our stockholders and represents an endorsement of our business model, industry leadership and financial strength," said Crist-bal Conde, president and chief executive officer of SunGard.
The deal, which is expected to close in the third quarter, will be financed by equity contributions from each of the investor firms, plus loans provided by units of JPMorgan Chase & Co., Citigroup Inc., Deutsche Bank, Goldman Sachs Group Inc. and Morgan Stanley.
SunGard, which earned $454 million on revenue of $3.6 billion last year, works with a majority of Wall Street's financial services companies. The Wayne, Pa.-based company supports almost three out of every four Nasdaq trades for its banking, mutual fund and stock exchange clients.
The company said its board will recommend the deal to shareholders and will not go ahead with a previous plan to spin off its Availability Services business.
Credit Suisse First Boston advised SunGard in the deal, while Morgan Stanley advised the investor group.