SS&C to acquire DST Systems for $5.4bn
Headquartered in Kansas City, Missouri, DST, a provider of information processing and servicing solutions, has more than 14,400 employees worldwide. SS&C says DST generated pro forma revenue of $2.3 billion for the 12 months ended 30 September 2017.
The transaction “significantly increases” SS&C’s scale, with approximately $3.9 billion in combined pro forma revenue and 13,000 clients.
On top of this, SS&C says it can move into the US retirement and wealth management markets. The plan is to use SS&C’s software platform for asset managers across wealth management account servicing.
SS&C expects $150 million of run-rate cost savings annually, achieved by 2020. In addition, it anticipates mid-teens earnings growth in 2019.
SS&C plans to fund the acquisition and refinance existing debt with a combination of debt and equity. For the twelve months ended 30 September 2017, consolidated EBITDA for the combined pro forma entity is expected to be approximately $1.3 billion, including “synergies”.
Both SS&C’s and DST’s board of directors have approved the transaction, and it is expected to close by the third quarter of this year. The transaction is subject to DST’s stockholder approval, clearances by the relevant regulatory authorities and other customary closing conditions.
By the way, in 2016, SS&C announced plans to buy customer relationship management (CRM) software provider Salentica.
Also in the same year, DST Systems said it was selling its North American Customer Communications (NACC) unit to Broadridge Financial Solutions.