SS&C Technologies Holdings announced that it has entered into a definitive agreement to acquire DST Systems.

Under the terms of the agreement, SS&C will purchase DST in an all-cash transaction for $84 per share plus assumption of debt – equating to approximately $5.4 billion.

Headquartered in Kansas City, Missouri, with more than 14,400 employees worldwide, DST — a global provider of specialized technology, strategic advisory and business operations outsourcing to the financial services and health care industries — generated $2.3 billion in revenue for the 12 months ended Sept. 30, 2017.

According to Bill Stone, chairman and chief executive officer of SS&C, the DST employees from around the world will join the SS&C team and have a continued local presence in Kansas City.

The transaction significantly increases SS&C’s scale, with approximately $3.9 billion in combined pro forma revenue and 13,000 clients. Additionally, the transaction expands SS&C’s footprint into the U.S. retirement and wealth management markets and adds more than 110 million investor positions across DST’s client base.

The combination leverages SS&C’s software platform for institutional and alternative asset managers to drive increased automation and efficiency across wealth management account servicing.

According to Stone, the combination of SS&C and DST 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.”

He added that, together, the two firms would continue to build on the relationship since SS&C acquired DST Global Solutions in 2014.

The transaction also represents a continuation of SS&C’s strategy of growth via acquisition.

As a result of this latest deal, SS&C expects to generate cost savings of $150 million annually, achieved by 2020.

SS&C said it plans to fund the acquisition and refinance existing debt with a combination of debt and equity. According to SS&C, the transaction is expected to be “immediately accretive” to its adjusted earnings per share before synergies, and is expected to result in mid-teens earnings growth in 2019.

Both SS&C’s and DST’s boards 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 stockholder approval, clearances by the relevant regulatory authorities and other customary closing conditions.

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