FIS, loaded with SunGard debt, may start buying again this year: sources

Fidelity National Information Services, which saw its debt more than double after it acquired SunGard Data Systems, may be back in buy mode soon, according to two sources.

Formerly an active buyer of fintech companies, FIS appears to have been out of the market since buying SunGard for $9.1 billion in November 2015. The software maker has been busy paying down the nearly $7 billion in debt it took on from the SunGard acquisition, one of the people said. FIS may start doing deals “as soon as later this year,” the person said.

FIS’s long-term debt as of Dec. 31, 2015, stood at $11.51 billion, more than double the $5.07 billion at the end of 2014, according to FIS’s 2015 annual report. In February, FIS said it had reduced debt outstanding by $1 billion to $10.5 billion.

“Glad to hear it,” a venture capitalist said upon hearing that FIS would be doing deals soon. “We need them back in the market for this whole fintech thing to work for us VCs.” FIS has an active venture arm, and prior to SunGard it was a very active buyer of financial-technology companies, the VC said.

SunGard is one of the most famous “club” deals from the private equity boom of the last decade. Seven buyout shops acquired SunGard, a financial-services company, in 2005 for $11.4 billion.

The PE firms — Bain Capital, Blackstone Group, Goldman Sachs Capital Partners, KKR, Providence Equity Partners, Silver Lake and TPG — held their investment for much longer than the typical PE hold of three to four years. The seven firms made a 1.65x return on their SunGard investment, Buyouts reported.

Earlier this year, FIS also closed its sale of SunGard’s Public Sector and Education business.

FIS put the unit on the block in March 2016 but the auction was busted by July, Buyouts reported. The sale “died” after the first round because “people changed their numbers,” the first source said.

Bidders eventually came back to the table, the person said. Vista Equity Partners ended up buying the SunGard unit for $850 million in December 2016.

FIS couldn’t be reached for comment.

Action Item: Contact Gary Norcross, president and CEO of FIS, at +1 904-438-6000

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