SunGard splits in two to save disasters
SunGard splits in two to save disasters
SunGard Data Systems Inc. has announced its plans to create a spin-off wing of its company by splitting in two and creating a disaster recovery services unit using a tax-free distribution of shares.
It will transform into two separate companies, one for business continuity, availability and disaster recovery and the other will focus on software and processing services.
SunGard's president and chief executive said: "This is great news for our stockholders, customers and employees. We are pursuing a strategic separation of SunGard into two financially strong, independent companies so that each can better focus on its distinct type of business and better pursue its own growth opportunities.
"Our software and processing business generates 60 percent of full-year 2003 revenue, and our availability services business generated the other 40 percent, so each business has significant size and scope. Each also has industry leadership positions, global operations, strong customer relationships, experienced management and specialised professional workforces.
"We are confident that our stockholders, customers and employees will be better served by the separation of these two businesses into more focused, autonomous companies."
The new business will keep SunGard's branding and James Simmons, who is currently the group CEO of the availability business, will become president and CEO of the new company.
About 2,000 people will be employed t here with about 10,000 customers. Conde also said: "Our two businesses were brought together in the leveraged buy-out that created SunGard in 1983. While they have thrived together, they have remained quite discrete with separate sales forces, different types of customers, distinct strategies and limited operating overlap.
"Our software and processing business provides a broad range of integrated software and processing solutions primarily to two verticals, financial services and higher education, while our availability services business provides a comprehensive continuum of information availability services to IT-dependent enterprises across all industries."
The spin-off will not result in a reduction of workforce at either business. Out of a total of about 13,000 SunGard employees, only about one hundred have job functions that span the two businesses, and they will be offered positions at one of the two companies.
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