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About Dst Systems, Inc.

SS&C Technologies helps its clients buy low and sell high and do some of it automatically. The company develops software for managing financial portfolios, alternative investments (such as hedge funds), loans, real estate equity, and securities trading as well as consulting, outsourcing services, and back-office processing. SS&C also sells software to the healthcare industry for managing information processing, quality of care, cost management, and payment. SS&C serves asset managers, insurance companies, banks, corporate financial offices, hedge funds, and government agencies among others. Clients include Fidelity, Credit Suisse, Pacific Life, and Humana. It has offices around the world.

Financial Performance

SS&C's revenue has risen by leaps and bounds in the past five years, propelled by raft of acquisitions.

In 2018, revenue went beyond a leap or a bound and rocketed more than 100% higher to $3.4 billion from $1.67 billion in 2017. The acquisitions of Intralinks and Eze in late 2018, CACEIS and DST in mid-2018, and CommonWealth Fund Services in late 2017 accounted for 97% of the year-over-year increase. Most of the added revenue went to the software-enabled services segment.

The number at SS&C's bottom line fell to $103 million in 2018 from about $329 million in 2017 due to increased expenses related to acquisitions and taxes.

SS&C's cash rose to $1.1 billion in 2018 from $64.7 million in 2017, influenced by borrowing for acquisitions. Operations generated $640 million in 2018, while investing activities used $7.1 billion and financing activities provided $7.5 billion.

As a byproduct of the latest wave of acquisitions (particularly DST Systems), SS&C has piled up about $8.3 billion in debt. That substantial level of debt could require it dedicate cash flow to debt payments, reducing money available for acquisitions and working capital. SS&C does have about $242.4 million available for revolving borrowings under its credit agreement.

Strategy

Acquisitions play a key role in SS&C's growth. It has bought about 50 companies since 1995 that expanded its product and service offerings, took it into new markets, and added to its client base within the financial services industry. The company's appetite for acquisitions remains undiminished as it paid about $5.4 billion for rival DST Systems in one of SS&C's biggest deals.

Looking to expand international revenue beyond a fifth of sales, SS&C seeks to leverage its software products and software-enabled services for foreign markets. It also intends to use its current presence in the Asia/Pacific region to as a base for expansion there. The proposed acquisition of GBST Holdings Limited, based in Australia, would extend SS&C's footprint in the region.

In 2018, SS&C introduced a smart investment operations and accounting system called Singularity. The system runs on technologies that include artificial intelligence, machine learning, and robotic process automation and was designed to save clients' money while improving performance.

 

Mergers and Acquisitions

SS&C offered $155 million to buy GBST Holdings Limited in 2019. GBST, based in Australia, provides administration and transaction processing software for retail wealth management organizations and investment banks.

In 2018 SS&C bought DST Systems for about $5.4 billion. The transaction significantly increased SS&C's scale, boosting its revenue to from $1.6 billion to a combined $3.9 billion. The deal put SS&C in the US retirement and wealth management markets while adding more than 110 million investor positions across DST's client base. DST became a wholly owned SS&C subsidiary. Previously, SS&C bought DST subsidiary, DST Global Solutions.

In another 2018 acquisition, SS&C bought Intralinks, which develops a communications platform for private equity and hedge fund investors, for $1.5 billion. Intralinks provides SS&C with a communications technology that facilitates collaboration between investors. Intralinks has more than 4,000 clients including banks and corporations.

Also in 2018 SS&C acquired CACEIS North America, the fund administration business of CACEIS based in Toronto and New York. CACEIS offers fund administration services and support. SS&C bought CACEIS North America from CACEIS, the asset servicing banking group of Crédit Agricole. 

In 2016 and 2017 SS&C made several acquisitions that increased its hedge fund client base. The company added CommonWealth Fund Services and Conifer Financial Services in 2017, following its 2016 deals for Wells Fargo's Global Funds Service and Citigroup's Alternative Investor Service. The total cost was about $490 million.

Dst Systems, Inc.

333 W 11TH ST
Kansas City, MO 64105-1773
Phone: 1 (816) 435-1000

Stats

Employer Type: Privately Owned
Director Client Services: Mike Brummel
Chief Executive Officer and Chairman: Stephen Hooley
Coo, Dst Financial Services: Kyle Mallot
Employees (This Location): 2,200
Employees (All Locations): 15,700

Major Office Locations

Kansas City, MO

Other Locations

Olathe, KS
Boston, MA
Bridgeton, MO
Jefferson City, MO
Kansas City, MO
Cohoes, NY
Harrisburg, PA