SS&C Technologies Acquires DST Systems

SS&C Technologies, the Windsor, CT-based provider of buy-side focused technologies and services, and DST Systems, a provider of technology, advisory and business operations outsourcing to the financial services and healthcare industries, have agreed that SS&C will acquire DST in an all-cash transaction for $84 per share plus assumption of debt, equating to approximately $5.4 billion.

DST Systems, headquartered in Kansas City, Missouri, with more than 14,400 employees worldwide, generated pro forma revenue of $2.3 billion for the 12 months that ended on September 30, 2017. This move expands SS&C’s footprint into the US retirement and wealth management markets and adds 110+ million investor positions across DST’s client base.

According to Bill Stone, chairman and CEO of SS&C, the two firms will “together, continue to build on the relationship since we acquired DST Global Solutions in 2014. We are also excited to have the DST employees from around the world join the SS&C team and look forward to having a continued local presence in Kansas City. Further, we look forward to partnering with DST’s customers. The combination will position us to capitalize on the demand for outsourcing in financial services and better enable our clients to address increasing competitive and regulatory pressures.”

SS&C has grown enormously in the past few years, typically by acquisition. The firm has now completed over 45 purchases of other firms and has over 80 offices around the world, employing tens of thousands of staff. Following its acquisition of Citi Investor Services and Wells Fargo’s Global Fund Services in 2016, it became the largest fund administrator in the world, while on the technology side, it is one of the largest providers of technology to buy-side firms, ranging from family offices through to large asset managers.

Speaking to WatersTechnology in September 2017, during the firm’s annual SS&C Deliver client conference in Chicago, Stone said that the key to successfully closing acquisitions and integrating them into the wider company was “trust,” along with the company’s focus on research and development—which, in a speech at the event, Stone said the firm spends approximately $150 million per year on—and broader investments in its people and technology.

“Since 2011, I think we’ve spent $5 billion on our platform. There’s no-one coming anywhere close,” he said. “Is every dollar we spent perfectly deployed? Of course not, but in some ways, you have to overwhelm these problems—that means getting expertise, labs, datacenters, all kinds of stuff, and then some really smart people to get it all to work. That’s what I think we’ve done as well as anyone else in the past 10 years or so… I think that approach has worked well with us. We have a lot of talent, and a lot of capability, and that’s what allows us to do the acquisitions.”

DST Systems is the firm’s first acquisition of the year, with the company acquiring CommonWealth Fund Services and client services provider Modestspark in 2017. Banner acquisitions since 2011 include the $2.6 billion acquisition of Advent Software in 2016, the aforementioned DST Global buy in 2014, as well as that of portfolio management system Portia from Thomson Reuters in 2012, and the purchase of GlobeOp in the same year.