Broadridge to acquire DST Systems’ North American Customer Communications for $410m
DST Systems, a provider of business data services to the financial services and healthcare markets, is selling its North American Customer Communications (NACC) unit to Broadridge Financial Solutions.
The deal is valued at $410 million in cash and is expected to close in July.
The NACC business generated $1.1 billion in revenue in 2015, or 40% of DST’s annual revenue.
It employs 2,300 people in the US and Canada.
DST’s CEO Steve Hooley comments that the sale of NAAC is “an important step in executing our well-defined strategy of focus and growth within our financial and healthcare services segments.
“In connection with ongoing strategic review of DST businesses, our management team and board of directors have decided to exit the customer communications business.”
DST also spent $75 million to repurchase 700,000 shares of its common stock earlier this year, completing the existing share repurchasing plan. The company’s board of directors authorised a new $300 million share repurchasing plan.
In addition, it has recently reduced its workforce by 1%, motivating this by the need to create more efficiencies within its financial services business.
As for Broadridge, the acquisition of NAAC will make it one of the largest providers of customer communications services in North America, including print and digital solutions, content management, postal optimisation and fulfilment. Broadridge will be able to reach more than 75% of the households in the region through its Investor Communications Solutions business.
In an unrelated M&A move, Broadridge has also recently acquired 4sight Financial Software, a provider of securities finance and collateral management systems to financial institutions worldwide.