25 April 2002 Disaster recovery specialist SunGard looks set to snap up its struggling UK rival Guardian IT in an attempt to boost its European presence.
Guardian IT is battling against falling sales and £110 million (€178.4m) in debts. In February 2002, the group revealed accounting discrepancies of up to £4 million (€6.5m). It recently won fresh financing which is expected to see the company through to June 2002.
The London-listed group ran into trouble because it overestimated demand for its services and is expected to make a loss of £28 million (€45.4m) for the year to December 2001. This compares to profits of £17,000 (€26,000) on sales of £86.4 million (€140.1m) in 2000. Guardian IT stock has fallen by more than 90% since November 2001, valuing the company at just £42.6 million (€69.1m).
Nevertheless, its long-term contracts with blue-chip customers and the earnings visibility this provides have proved attractive to potential bidders. It is said that systems giant Hewlett-Packard and the private equity firms Alchemy and Apax have also expressed interest in the disaster recovery and data storage services group.
However, Guardian IT is looking for a quick sale to prevent worried customers from defecting to rivals when their contracts come up for renewal.