By Richa Naidu, Abhirup Roy and Liana B. Baker
(Reuters) - Financial industry software maker Fidelity National Information Services Inc (N:FIS) has agreed to buy rival SunGard Data Systems Inc for $9.1 billion including debt, in order to get access to Sungard's thousands of lucrative trading and money management clients.
The deal brings to a close one of the longest-held investments in private equity history, and ends preparations by SunGard's owners to take the Wayne, Pennsylvania-based company public.
Fidelity National said the deal, for which it will pay 45 percent in cash and 55 percent in stock, would create a company with more than $9.2 billion in annual revenues and would immediately add to its earnings per share.
Silver Lake Partners, TPG Capital, Bain Capital, Blackstone Group (N:BX), Goldman Sachs Capital Partners, KKR & Co (N:KKR) and Providence Equity Partners Inc bought SunGard 10 years ago for $11.4 billion, including about $500 million in debt. They will now become shareholders in the combined publicly listed company.
The financial crisis hurt SunGard's banking clients and the consortium struggled to boost its value to a point where they could cash out and make a decent return. Private equity firms typically consider their investments successful if they have generated between two and three times their money in a period of three to seven years.
The private equity firms now expect to achieve a return of at least 1.5 times to 2 times their money on the deal, according to people close to the buyout consortium.
SunGard's business, which includes school and public sector software, has slimmed down since its buyout in 2005. It divested most of its higher education business for $1.8 billion in 2012, and spun off its disaster recovery business last year.
The owners have also taken out about $700 million in dividends from the business over the years.
Fidelity National shares were up 7.6 percent at $70 on the New York Stock Exchange on Wednesday.
The combined company will have more than 55,000 employees in more than 100 countries, said Jacksonville, Florida-based Fidelity National.
BofA Merrill Lynch and Centerview Partners LLC acted as financial advisers to Fidelity, while Willkie Farr & Gallagher LLP served as legal adviser.
Goldman Sachs & Co (NYSE:GS), J.P. Morgan Securities, Barclays (LONDON:BARC), Deutsche Bank (XETRA:DBKGn) Securities Inc and Credit Suisse (SIX:CSGN) acted as financial advisers to SunGard. Simpson Thacher & Bartlett and Shearman & Sterling served as legal advisers.