DST Systems Inc. has entered into agreements to acquire State Street Corp.'s ownership stakes in Boston Financial Data Services Inc. and International Financial Data Services Ltd., two joint ventures. The companies will become wholly owned, indirect subsidiaries of DST.
West Side Investment Management Inc., a DST subsidiary, officially entered into an agreement with State Street to acquire 2,041,187 shares of Boston Financial Data Services for $157.6 million, which is based on State Street's closing share price from March 24. The closing of the agreement is subject to customary closing conditions.
DST entered into a second agreement with State Street to acquire its 50% stake in International Financial Data Services UK and all of its membership interests of International Financial Data Services Realty UK LLC for $175.0 million in cash. DST already owned the other 50% stake in the company.
The two companies also entered a five-year joint marketing agreement that will allow State Street Bank and Trust Co. to refer Boston Financial to provide transfer agency services, and DST can refer State Street Bank and Trust Co. opportunities for fund administration services, mutual fund accounting and to provide custody.
DST said it expects to see approximately $20 million of cost savings following its acquisition of Boston Financial Data Services, which it expects will be accretive to diluted EPS by 15 cents to 19 cents over the first 12 months, before factoring any costs.
In the U.K. deal for International Financial Data Services, the company is expecting about $440 million of incremental annual operating revenues once the acquisition is complete. DST also expects the transaction to yield a gradual increase in diluted EPS by 18 cents to 22 cents over the first 12 months, before factoring in any other costs.
State Street CEO and Chairman Joseph Hooley and DST Systems CEO Stephen Hooley are brothers, according to a regulatory filing. The deals were approved by the independent corporate governance and nominating committee of DST's board.