IBS Journal February 2015
SS&C buys rival DST Global Solutions for $95 million
US-based SS&C has paid $95 million in cash for rival investment management software vendor, DST Global Solutions. The acquisition has brought 390 peo- ple, a strong presence in Asia Pacific and EMEA, and two systems for the buy-side community: Anova, a newer middle office development, and HiPortfolio, an older front-to-back office system for invest- ment and asset managers. Reflecting its age, HiPortfolio is Cobol-based and uses a C-Tree database. It makes up 80 per cent of DST’s revenue, while Anova accounts for 15 per cent; the remaining five comes from legacy products. Plans are now being devised on the
integration of the teams, as well as bring- ing the acquired products into SS&C’s portfolio of offerings, which includes a number of competing systems (e.g. Por- tia, which was offloaded by Thomson Reuters in 2012). The DST business will sit within SS&C’s institutional manage- ment business. There will be rationalisa- tion, although no details are yet available regarding possible job cuts. However, Bill Stone, chairman and CEO of SS&C, notes that there are no plans to sunset either of the acquired systems. ‘We are very pleased with this acqui-
sition, as it brings us global clients and well-established technology,’ states Stone. The combined products and expertise will ‘create a true market differentiator’, he believes. As for the reasons for DST Sys- tems offloading the business, Stone mus- es that ‘perhaps it wasn’t DST’s key focus’. He adds that SS&C was ‘sole-sourced’ for this sale. DST’s revenue has been flat for the
last few years ($60 million in 2012 and $65 million in 2013) and it has strug- gled to gain new business. However, Stone describes its existing client base as ‘extremely sticky’. Maintenance consti- tutes nearly 70 per cent of the vendor’s revenue. Also, DST has a good spread of customers across all sizes, from smaller local players like Philip Asset Manage- ment in Thailand, Vero in New Zealand and Medinvest in South Africa, to top- tier multinationals such as HSBC, Alli- anz Global Investors and UBS. The latter
© IBS Intelligence 2015
Bill Stone, SS&C
segment is a prime target for cross-sell- ing, Stone says. Stone anticipates the DST business to
have a five to ten per cent organic reve- nue growth in the next year. ‘We are fairly optimistic,’ he says. Whilst DST used to be a regular competitor to SS&C in Europe and Asia Pacific – the two vendors bid for the same deals ‘half of the time’, observes Stone – this was notably less so in North America, and now there is an opportu- nity to establish Anova and HiPortfolio here. At present, around 90 per cent of DST’s business comes from EMEA and Asia Pacific. There is also potential to reignite the
market’s interest in DST’s systems by add- ing a hosted option (DST was starting to move this way not long before it was acquired by SS&C). Stone anticipates the SaaS version of the systems to be avail- able in the next three to six months. The vendor is pondering taking a step further to a full BPO offering, he adds, although this will take longer to bring to market. Although this is quite a notable pur-
chase, it is not the largest the acquisitive SS&C has done over the last few years. In 2012, it splashed out $897 million on GlobeOp and $170 million on the afore- mentioned Portia business.
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