Target One: Thomson Reuters trade and risk management business
Sponsor: Vista Equity
Seller: Thomson Reuters
Financial Adviser: Barclays Capital (Thomson Reuters)
Target Two: Sage Healthcare
Price: $320 million
Sponsor: Vista Equity
The San Francisco buyout shop
Vista Equity, which focuses on investing in software and technology-enabled businesses and has $2.7 billion in committed capital, struck a deal with Thomson Reuters, the publisher of Buyouts, to buy the company’s trade and risk management software business, which includes flagship product Kondor, Thomson Reuters said Sept. 23. The value of the sale was not disclosed.
The loan to support the leveraged buyout was originally expected to be around $200 million, sources familiar with the deal told sister service Thomson Reuters LPC, which tracks the loan market. The loan to support the leveraged buyout could rise to around $280 million after negotiations take place, they said, with the original debt package around $185 million drawn and $220 million in total. GE Capital, ING, Lloyds and Royal Bank of Canada are among the banks close to the debt financing but banks which backed the unsuccessful bidders could also provide debt, the sources said.
Vista beat bids from other buyout firms including
The trade and risk management business operates under the Thomson Reuters enterprise solutions business. Kondor provides trade and risk software as well as liquidity risk systems for treasury and cash management operations. Its main competitors include Misys, SunGard Data Systems and French software company Murex.
In April, Thomson Reuters said it expects to raise about $1 billion from the sale of its enterprise risk management and investment accounting software businesses, along with previously announced sales of a legal education product and Scandinavian legal and tax and accounting units. In June Thomson Reuters said it also planned to sell a unit of its health care business. In 2010 the unit had revenues of about $450 million.
Separately, the British software developer Sage said it would sell its health care unit to Vista Equity for $320 million, enabling the firm to focus on its core U.S. customer base and to return the proceeds to shareholders, according to sister news service Reuters. Sage, which will return all of the proceeds through a share buyback program, said Sept. 22 it had reached a definitive agreement to sell the subsidiary, which is used by U.S. physician practices. It expects the sale to be completed in November.
“The sale of Sage Healthcare allows management in the North American region to focus on the considerable opportunities that exist within our core US customer base,” Chief Executive Guy Berruyer said. “We are also announcing a share buyback program with the proceeds of the sale, reflecting our commitment to delivering shareholder value.”
Sage Healthcare’s revenue for the year ended Sept. 30, 2010, was £157 million ($246 million). Gross assets were £393 million and the overall loss on the disposal is expected to be between £60 million and £70 million.
(Isabell Witt is a correspondent for Reuters in London; additional reporting by Claire Ruckin and Kate Holton.)