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Banking

From spin-off to buyout: how Sungard became a record-breaking deal

Sungard's $11.3 billion leveraged buyout has seven private-equity partners plus investment from the existing management team. Is this a recipe for strategic growth or will it lead to corporate confusion?

return to Private equity takes the supersize option

Conde: "Our company needs
investors with different time
horizons"

IN MARCH, Cris Conde, president and CEO of Sungard, was about to go swimming with dolphins with his two daughters in the Mexican resort of Cancún. Then he learnt that word had got out that his company was in negotiations to sell itself to a consortium of private-equity buyers in one of the largest leveraged buyouts in history. "I figured I could take one vacation before we went public [with the deal]. It was 6am and we had to send out a press release by the opening of the market confirming that we were in discussions about the buyout of the company."

Just a week later, on March 28, Sungard announced that it had agreed the largest private-equity deal since Kohlberg Kravis Roberts (KKR) bought RJR Nabisco in 1989 for $25 billion.

It's not surprising that word of such a large and complex deal leaked out, not least because so many players were involved. First, there was a consortium of an unprecedented seven private-equity buyers: Silver Lake Partners, Bain Capital, Blackstone Group, Goldman Sachs Capital Partners, KKR, Providence Equity Partners and Texas Pacific Group.

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