Wayne, Pennsylvania-based Sungard, which specializes in the financial services sector said it will pay approximately $584m in an all-cash deal for SCT, which provides software and services to the US higher education sector. The deal values each SCT share at $16.50, a 14% premium on its closing price on Tuesday of $14.50. Its shares shot up to take up most of the premium in early trading Wednesday.
Malvern, Pennsylvania-based SCT will become an operating unit of Sungard Public Sector and Nonprofit Systems, and will be led by SCT’s president and CEO Mike Chamberlain. Sungard expects to complete the deal in the current quarter.
Sungard’s initial entry into higher education was through its acquisition in 1995 of BiTech Software, which provides financial, payroll and HR systems to colleges and universities. In 1999 it acquired BSR, a provider of systems to higher education. The current head of the unit, Bob Clarke, said in a statement: these acquisitions have convinced us of the attractiveness of higher education as an area for further investment.
Since SCT’s inception in the late 60s, the company has gone thorough several transformations. Recently it has sold its interests in other vertical markets to concentrate solely on education. In June 2001, it agreed to sell its government business to Dallas-based information-technology outsourcing company ACS for $85m in cash. In May 2002, it sold its process manufacturing software business to Golden Gate Capital and Parallax Capital Partners for $13.2m in cash, and in March 2003 it finally completed the sale of its energy and utilities business to Indus International Inc for $37.8m.
In its most recent financial quarter, SCT announced record sales of $76.4m, with a net income of $8.8m. With cash to hand of $124m, its balance sheet is also healthy.
This article is based on material originally produced by ComputerWire.
