KANSAS CITY, Mo. and
BOSTON, March 27, 2017 /PRNewswire/ -- DST Systems, Inc.
(NYSE: DST), a leading global strategic advisory, technology, and
operations outsourcing company, and State Street Corporation (NYSE:
STT), today announced definitive agreements for DST to acquire
State Street's ownership interest in the Boston Financial Data
Services, Inc. ("BFDS") joint venture and the International
Financial Data Services Limited ("IFDS U.K.") joint venture in the
UK. BFDS provides innovative shareholder recordkeeping,
intermediary and investor services, and regulatory compliance
solutions to financial services clients in the United States.
IFDS U.K. is an investor and policy holder administrative services
and technology provider to the collective funds, insurance, and
retirement industries. Following completion of these
acquisitions, DST will own 100% of the equity interests in both
BFDS and IFDS U.K. DST and State Street will continue to
service offshore and cross-border markets in Canada, Ireland and Luxembourg through the 50/50 joint venture
International Financial Data Services, L.P. ("IFDS L.P."). The IFDS
U.K. acquisition has closed and the BFDS acquisition is expected to
close within the next several days.
"We are pleased to become the sole owner of BFDS and IFDS U.K.,"
said Steve Hooley, Chairman, CEO and
President of DST. "These businesses have always been
strategically important to DST and we are confident that we can
drive significant enhancements to the client experience and improve
execution of key initiatives, while unlocking meaningful synergies
and enhancing value to DST and its shareholders."
Hooley added, "We are also excited about our continuing joint
venture relationship with State Street through IFDS L.P. to jointly
operate the Canada, Ireland and Luxembourg entities. We believe the joint
venture structure in these countries provides the competitive
advantage of a best-in-market integrated solution required for
off-shore and cross-border markets."
Mike Rogers, President of State
Street said, "This decision involves an ownership change, not a
service-level change for our clients. We will continue to work with
DST as it offers transfer agency services for our clients globally.
This decision will also allow us to continue to focus on our core
competencies and further invest in areas where we can expand market
share or add product and service capabilities for our clients."
In the US, DST's wholly-owned subsidiary will acquire State
Street's ownership interest in BFDS by delivery to State Street of
approximately 2.0 million shares of State Street common stock owned
by DST for total consideration of $157.6
million in a non-taxable exchange under Section 355 of the
Internal Revenue Code. BFDS is expected to contribute
approximately $220 million of
incremental operating revenue and $20
million of operating income to DST over the next twelve
months before synergies, restructuring costs and amortization of
the intangibles resulting from the acquisition. DST expects
to achieve approximately $20 million
of cost savings from the realization of synergies within the first
18 months and expects the transaction to be accretive to diluted
earnings per share by $0.15 to $0.19
in the next twelve months before synergies, restructuring costs and
amortization of intangibles.
In the U.K., DST's wholly-owned subsidiary will acquire the
ownership interest in IFDS U.K. for total cash consideration of
$175 million. The acquisition
will be funded through cash on hand and DST's existing debt
facilities. DST expects the consolidated IFDS U.K. businesses
to contribute approximately $440
million of incremental annual operating revenues upon
acquisition and $20 million of
operating income before synergies, restructuring costs and
amortization of intangibles over the next twelve months. DST
expects the IFDS U.K. transaction to be accretive to diluted
earnings per share by $0.18 to $0.22
in the next twelve months before synergies, restructuring costs and
amortization of intangibles.
About DST
DST Systems, Inc. (NYSE: DST) is a
leading provider of specialized technology, strategic advisory, and
business operations outsourcing to the financial and healthcare
industries. DST enables clients to transform complexity into
strategic advantage by helping them continually stay ahead of and
capitalize on ever-changing customer, business and regulatory
requirements in the world's most demanding industries. For more
information, visit the DST website at www.dstsystems.com.
About State Street
State Street Corporation (NYSE: STT) is one of the world's leading
providers of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $29
trillion in assets under custody and administration and
$2.47 trillion* in assets under
management as of December 31, 2016,
State Street operates in more than 100 geographic markets
worldwide, including the US, Canada, Europe, the Middle
East and Asia. For more
information, visit State Street's website at
www.statestreet.com
* Assets under management for State Street Global Advisors
(SSGA) were $2.47 trillion as of
December 31, 2016. AUM reflects
approximately $30.62 billion (as of
December 31, 2016) with respect to
which State Street Global Markets, LLC (SSGM) serves as marketing
agent; SSGM and SSGA are affiliated.
Investor Contacts:
John Riley
DST Chief Marketing Officer, Communications and Investor
Relations
1-816-435-1000
Anthony Ostler
State Street Senior Vice President and Head of Investor
Relations
1-617-664-3477
Media Contacts:
Laura M.
Parsons
DST Global Public Relations
1-816-843-9087
mediarelations@dstsystems.com
Carolyn Cichon
State Street Corporation
1-617-664-8672
ccichon@statestreet.com
Safe Harbor Statement
Certain material presented in the press release includes
forward-looking statements intended to qualify for the safe harbor
from liability established by the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include, but
are not limited to, (i) all statements, other than statements of
historical fact, included in this press release that address
activities, events or developments that we expect or anticipate
will or may occur in the future or that depend on future events, or
(ii) statements about our future business plans and strategy and
other statements that describe the Company's outlook, objectives,
plans, intentions or goals, and any discussion of future operating
or financial performance. Whenever used, words such as "may,"
"will," "would," "should," "potential," "strategy," "anticipates,"
"estimates," "expects," "project," "predict," "intends," "plans,"
"believes," "targets" and other terms of similar meaning are
intended to identify such forward-looking statements.
Forward-looking statements are uncertain and to some extent
unpredictable, and involve known and unknown risks, uncertainties
and other important factors that could cause actual results to
differ materially from those expressed or implied in, or reasonably
inferred from, such forward-looking statements. Factors that could
cause results to differ materially from those anticipated include,
but are not limited to, the risk factors and cautionary statements
included in the Company's periodic and current reports (Forms 10-K,
10-Q and 8-K) filed from time to time with the Securities and
Exchange Commission. All such factors should be considered in
evaluating any forward-looking statements. The Company undertakes
no obligation to update any forward-looking statements in this
press release to reflect new information, future events or
otherwise.
Non-GAAP Financial Measures
This press release contains financial information calculated
other than in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP") and may differ from the methods used by other
companies. Such non-GAAP financial measures include operating
income and diluted earnings per share excluding potential future
savings from synergies, restructuring costs and amortization of
intangibles. Management believes the exclusion of these items
from the computation of operating income and diluted earnings per
share provide meaningful supplemental information regarding future
performance following the consummation of the transactions.
These measures are used by DST management to evaluate our
operations and are regularly presented to DST stockholders in
connection with the issuance of quarterly earnings results. The
Company has not reconciled non-GAAP operating income and diluted
earnings per share to the relevant GAAP measure because it has not
yet finalized the restructuring plans and have not completed the
purchase accounting for the acquisitions and therefore are unable
to forecast these items.
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SOURCE DST Systems, Inc.