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By Heather McLean, 26 April 2002 12:30

NEWS US disaster recovery firm SunGard has bought its troubled European rival Guardian iT for £56m. SunGard bought Guardian for 80p per share giving it a market value of £167m. However, the company's debts of £111m reduce that value to £56m. Edward Roskill, technology specialist at London Technology Partners, the financial advisory firm working with SunGard on the deal, said: "The equity value of the business stands at £56m and its debt stands at £111m. The underlying business is very solid." Keith Tilley, European MD for SunGard, said: "Guardian's customer base is very strong and we expect to be able to exploit it." SunGard today purchased 24.9 per cent of Guardian's shares to secure the deal. Tilley said job cuts already made at Guardian over recent months will aid the integration of the two businesses. He said: "We will need to look carefully at Guardian before we make any cuts. However, it's a complementary fit between the two companies. There is a slight overlap but Guardian has already made redundancies so there is likely to be less cuts than there could have been." SunGard has had a European presence since the early 1980s but only has 500 customers for its service, compared to Guardian's 2,500-strong customer base. However, SunGard claims its average contract value is higher than Guardian's. Tilley explained what the deal means for customers: "Guardian customers will have a financially secure parent which is important for this kind of business and access to a global company which is good if they expand into the US or the Far East." He added: "The purchase of Guardian gives us the opportunity to expand into the Nordic area and gives our US customers extra storage facilities." Guardian iT will change names to SunGard Europe as soon as the deal is finalised, which Tilley expects to happen within seven weeks.