SNL Financial Provides Additional Data on Private Equity Consortium's Bid for SunGard Data Systems Inc. (SDS)

CHARLOTTESVILLE, VA. -- SNL Financial has released data tables on how the announced $11.5 billion bid for SunGard Data Systems Inc. (NYSE: SDS) fits into the financial technology marketplace. The private equity consortium of buyers is led by Silver Lakes Partners LP and consists of Bain Capital Inc., Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co., Providence Equity Partners and Texas Pacific Group. SunGard provides software and processing products to financial services firms.

SNL Financial’s Director of Financial Institutions Group, David Kungl, sees the deal as a symptom of increased interest in the financial technology space, but at a cost. “There is a ton of private equity money out there chasing a handful of properties. Pricing is definitely an issue on this one as they are paying forty-plus percent more than the investing public was willing to pay. Now, they can’t exactly turn around in six months and take it public again, that won’t fly. Obviously, they’re in this for the long haul.”

SNL Financial’s Senior Analyst for Financial Technology, Eric Fitzwater, believes the high pricing will continue for companies in the investment technology sector. “As the use of electronic processing continues to increase and availability expands globally, transaction-oriented sectors will continue to have high pricing multiples.”

The SunGard deal yields a price/book ratio of 319.2% while other players in the arena, DST Systems (NYSE: DST) and SS&C Technologies (NASDAQ: SSNC), are priced at 513.8% and 337.2% of book value, respectively. “SunGard has a good product innovation background and has aligned itself with colleges and governments, so it’s positioned nicely for future growth,” adds Fitzwater.

The pricing bodes well for other investment technology companies in this sector, such as BISYS Group (NYSE: BSG) and Advent Software (NASDAQ: ADVS). Please click on the following link for additional deal-related analysis and implied price per share for other entities in this sector http://www.snl.com/press/20050329.pdf.

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