DST Systems provides information processing software and
services to the mutual fund, insurance, retirement, and healthcare
industries, among others, primarily in North America. Its two top
segments (customer communications and financial services) together
contribute most of sales. Its financial services segment offers
software and systems used to handle a wide range of tasks including
shareowner recordkeeping, investment management, and business
process management; the customer communications division includes
integrated print and electronic billing and statement products. DST
generates most of its sales in the US.
The customer communications segment accounted for almost half of
sales with financial services accounting for about two-fifths of
sales. The healthcare services segment, which provides medical and
pharmacy claims administration, generates about 13% of sales.
The company is also involved in real estate and equity
investments in various companies.
The US is DST's largest market, accounting for more than 80% of
sales. Its largest international market is the UK (about 12% of
The company has locations in the US, as well as in Australia,
Canada, India, Thailand, and the UK.
Sales and Marketing
DST markets its products directly, as well as through subsidiaries,
joint venture affiliates, and strategic alliances.
DST's revenue of $2.75 billion for 2014, up 3% from the prior year,
marks the company's fifth straight year of growth. Sales for
financial services and healthcare grew in 2014, but customer
communications revenue dipped. Net income leaped 68% to more than
$590 million in 2014 on higher revenue and a gain from discontinued
operations -- the sale of its global solutions business. Cash flow
from operations dropped to $312 million in 2014 from $395 million
in 2013 because of a change in income tax and account
Mergers and Acquisitions
The company has historically been very active on the acquisition
front to complement its product line and expand into new geographic
areas. DST has balanced its acquisition strategy by purchasing both
complementary software and technology providers as well as service
providers, with a particular emphasis on buying business process
outsourcing (BPO) and consulting firms.
In 2015, DST's wholly-owned subsidiary ALPS agreed to buy Red
Rocks Capital, a private equity and other private asset investment
firm, for about $65 million. Red Rocks adds expertise and
experience in alternative investments to ALPS and DST. ALPS and Red
Rocks have had business engagements since 2007.
DST acquired kasina, a strategic advisory firm to the asset
management industry, in early 2015. DST hopes to combine its
analytics and sales reporting tools with kasina's understanding of
challenges that face asset managers and insurers to uncover new
revenue opportunities for the financial industry.