Disaster recovery specialist SunGard Data Systems is to acquire its struggling British counterpart Guardian IT in a £168 million (€272m) cash deal. SunGard will also take on Guardian IT’s sizeable bank debt and other financial obligations.
SunGard, which is the largest independent data storage and disaster recovery group in the US, wants to use Guardian IT’s assets to expand into the European market – particularly France and Britain. Shares in Guardian IT rose by a fifth on the news.
SunGard is buying Guardian IT shares at 80 pence (€1.30) each, which represents a 122% premium on the closing price of 36 pence (under €0.60) on 13 February 2002, when Guardian IT first indicated that it was engaged in takeover talks.
However, SunGard’s offer represents a 95% discount on the peak of £16.55 (€26.80) per share Guardian IT stock reached in 2000.
SunGard’s offer values the British company at approximately £56 million (€90.7m). Guardian IT also has about £111 million (€179.8m) in debt, which SunGard is taking on. SunGard’s offer is subject to approval by Guardian IT’s shareholders and regulatory clearance.
With annual revenues of $2 billion (€2.23bn), SunGard serves over 20,000 clients across more than 50 countries. The company reportedly beat 15 other potential buyers in its bid for Guardian IT.
London-listed Guardian IT had overestimated demand for its services and is expected to incur a loss of £28 million (€45.4m) for the year to the end of December 2001. The long-term contracts with blue-chip customers that the British company has and its earnings visibility have nevertheless proved attractive to potential bidders.