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SS&C boosts banking software heft with $5.4 billion DST deal


(Reuters) - SS&Technologies Holdings Inc said on Thursday it would buy Systems Inc in $5.4 billion deal, expanding its through its largest deal to date.

SS&C's offer of $84 in cash for each share represents premium of 29 percent to the stock's closing price on Tuesday, day before reported the companies were in advanced talks.

The report sent DST's shares surging nearly 23 percent on Wednesday, while SS&C's closed up 12.8 percent. Both stocks jumped to record highs on Thursday, before easing to trade up about 5 percent each.

The deal is Windsor, Connecticut-based SS&C's latest in its quest to build out its that serves banks and the investment industry. It also gets an entry into the healthcare market.

SS&said in statement that the combination would better meet the demand for outsourcing in and help its clients address competitive and regulatory pressures.

analysts said investors should not be too concerned with DST's lower margins, particularly within

"SS&has long track record of acquiring underperforming businesses, reducing cost, and increasing efficiency to bring performance more closely in line with its average margins," Morgan Stanley's said in client note.

is SS&C's first large deal since its $2.3 billion takeover of accounting software maker in 2015. year earlier, SS&had bought DST's investment data analytics unit for $95 million.

Given that the combined SS&C-will get its revenue mainly from the United States, it will also benefit from the recently enacted tax reforms, said in research note.

SS&said it plans to fund the acquisition and refinance existing debt with combination of debt and equity. It expects the deal to immediately add to adjusted earnings, before synergies, after closing in the third quarter.

Excluding DST's debt, the transaction is valued at about $5.06 billion, according to calculations.

and advised SS&C, while gave BofA Merrill Lynch advised and Skadden, Arps, Slate, gave

(Reporting by and in Bengaluru; Editing by and Richard Chang)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 05:35 IST