SunGard Draws $10 Billion in Leveraged Buyout Talks

A private-equity consortium led by San Francisco-based Silver Lake Partners is in talks to buy SunGard Data Systems for as much as $10 billion, a move that would mark one of the biggest leveraged buyouts since the RJR Nabisco takeover, the New York Post reports.

The group, which includes buyout heavyweights Texas Pacific Group and Thomas H. Lee Partners, has been engaged in serious discussions with SunGard for the past few weeks about buying the software and processing-services provider and taking it private, the Post said, citing sources familiar with the matter.

The proposed leveraged buyout of the company would likely require the big investors to commit as much as $3 billion to $4 billion in equity with the remaining portion of the acquisition financed with debt.

In a release posted on its Web site, the company said, "SunGard does not intend to comment on any specific discussions or any potential transaction unless and until it enters into a definitive agreement with respect to a transaction."

SunGard, headquartered in Wayne, Pa., develops trading and accounting systems for banks, brokerage houses, mutual funds and other financial services companies. It has roughly 10,000 employees and serves about 15,000 clients, including the world's 50 largest financial services firms.

The takeover chatter comes on the heels of SunGard's announced spin-off of its disaster-recovery business in October. The unit, which has grown exponentially since the Sept. 11 terrorist attacks, accounted for 34% of the company's total revenue last year, according to the Post.

Credit Suisse First Boston and law firm Shearman & Sterling, which had already been retained in connection with the spin-off, are serving as advisors in the negotiation process.