Court Approves SunGard Bid For Comdisco UnitCourt Approves SunGard Bid For Comdisco Unit
The Department of Justice must now rule on whether or not SunGard's acquisition of Comdisco's availability services constitutes an antitrust violation.
November 12, 2001
SunGard Data Systems Inc. scored an important victory late Nov. 12 in its bid to acquire Comdisco Inc.'s availability services business. After a three-day hearing, the U.S. Bankruptcy Court for the Northern District of Illinois approved SunGard's proposed $825 million acquisition of Comdisco's availability services business while ruling that Hewlett-Packard's highest bid was submitted after the auction had closed.
The bankruptcy-court ruling ends a bidding controversy that began when HP raised its initial bid for Comdisco from $610 million to $750 million after the bidding process was closed Oct. 11. The transaction is still subject to approval by the U.S. District Court for the District of Columbia in the antitrust case that the Department of Justice filed against Comdisco and SunGard, the second and third largest players in the availability services space. A District Court ruling is expected by Nov. 15. The only impediment to the deal now is the Department of Justice's ruling on whether or not SunGard's acquisition of Comdisco's availability services constitutes an antitrust violation, says SunGard senior VP and general counsel Larry Gross. "This is a major and total victory for SunGard," Gross says. "We wouldn't be going to all this trouble if we thought we were going to lose." The process has played out like a soap opera, and it's not over yet, says Adam Couture, Dataquest's senior analyst of IT services. Couture also says a loss of Comdisco's availability services, a hot ticket since the attacks of Sept. 11, would be a bitter pill for HP to swallow, particularly because of last year's aborted attempt to acquire PricewaterhouseCoopers' consulting business and the controversy surrounding HP's bid for Compaq. If the Department of Justice gives its approval, the SunGard acquisition would include the domestic operations of Comdisco's continuity services business, professional services organization, and Web hosting business, as well as the corresponding operations in the United Kingdom and France.
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