SunGard Higher Education to be acquired for $1.775 billion, combined with competitor Datatel

Malvern-based Sungard Higher Education and its competitor Datatel today announced a definitive merger agreement. Affiliates of private equity firm Hellman & Friedman LLC will acquire the SunGard Higher Education businesses from SunGard Data Systems Inc. for an aggregate cash purchase price of $1.775 billion and combine it with Datatel.

I have four immediate questions:

How will the combined entity compete with Workday's recent entry into the Higher Ed market announced last month? Workday has a strong SaaS platform and and its founders have extensive experience in the Higher Ed market through Peoplesoft.

What progress are SunGard and/or Datatel making in terms of having a true SaaS offering?

Will SunGard/Datatel pursue a course management platform (Blackboard?). SunGard and Blackboard have recently shared a common investor in Providence Equity.

Does this move mark the start of a further breakup of SunGard's assets?

SunGard Higher Education grew from Malvern-based Systems & Computer Technology, which SunGard acquired in 2004, supplemented with other acquisitions. Last week SunGard Higher Ed reported revenue of $150 million in the 2nd quarter of 2011, unchanged from last year.

Datatel is based in Fairfax, Va.

Datatel’s current chief executive officer, John Speer, will serve as chief executive officer of the combined business. Ron Lang, the current chief executive officer of SunGard Higher Education, will be vice chairman of the board of directors.

Hellman & Friedman LLC is a private equity investment firm with offices in San Francisco, New York and London and over $25 billion under management.


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