SunGard trolls U.K. for deals by David Shabelman in San Francisco Updated 07:42 AM EST, Jul-11-2003 Marking a deeper push into Europe, financial services technology provider SunGard Data Systems Inc. agreed Thursday, July 10, to acquire Sherwood International plc for $105 million. The acquisition follows SunGard's purchase in May of London Pacific Advisory Services Inc., a provider of technology services to financial institutions, for an undisclosed price. It also builds on its $243 million acquisition last year of U.K.-based data recovery firm Guardian iT plc. "I think SunGard considers the overseas markets to be viable growth opportunities," said Brad Moore, research analyst with Putnam Lovell NBF Group Inc. "I don't know that geographic barriers offer limits to their markets. There are significant opportunities overseas to advance their business, and they have been doing that for some years." Madeline Hopkins, vice president of investor relations for SunGard, said the company is open to acquisitions regardless of their location. "Our acquisitions are truly opportunistic," she said. "I wouldn't say we're looking more diligently in one country rather than another. There is no mandate to buy certain types of businesses of certain sizes in geographic locations or certain business models." One analyst said SunGard's size and financial strength has allowed it to profit from the fall in corporate valuations in recent years. "What we've seen out of SunGard this year are a couple acquisitions where they have found small companies with good software products that are perhaps struggling a bit because the market is struggling, and they can tuck them into their existing infrastructure. That's what this deal does," he said. Earlier this year SunGard bought Caminus Corp., a provider of energy industry software, for $159 million, and HTE Inc., a software provider for government agencies, for $121 million. Shareholders of Sherwood, a Chertsey, U.K.-based insurance software firm, must still approve the transaction. The offer represents a 41% premium to Sherwood's closing share price on April 28, the last business day prior to the company's announcement that it was in preliminary discussions concerning a possible buyout, and a 10% premium to its July 9 closing price. In late April Sherwood said it was exploring a management buyout that valued the company at $80.4 million. CEO Mike Shinya and chief financial officer Mark Williams were expected to lead the buyout. At the time, it said a number of private equity firms had approached the company about going private or providing additional equity. SunGard emerged as the leading bidder for the company last week. Sherwood officials could not be reached for comment. Advising SunGard on the deal was Citigroup Inc. and law firm Allen & Overy. Simon Willis and Ross Christie of Close Brothers Group plc in London provided Sherwood with financial advice. U.S. technology companies have been actively seeking opportunities overseas. On July 4 Hewlett-Packard Co. of Palo Alto, Calif., announced it would acquire the identity management assets of Baltimore Technologies plc, a struggling U.K.-based security technology firm, for an undisclosed price. Microsoft Corp. of Redmond, Wash., also made a splash in Europe last year with its $1.45 billion acquisition of Danish enterprise software maker Navision Software A/S. Martin Wolf, president of Martin Wolf Securities, said that slow growth in the U.S. is driving companies to seek business abroad. "The idea of growing at high rates organically doesn't exist anymore," he said. "Information technology is not growing at 20% or 30%. How do you maintain growth that warrants a higher valuation? In many cases here, companies are overvalued and privately held. Clearly, you'll see more deal activity in Europe."