DST SYSTEMS, INC. (NYSE:DST) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01 Entry Into Material Definitive Agreement.
On March 27, 2017, DST Systems, Inc., a Delaware corporation
(DST) and/or certain subsidiaries, entered into a series of
definitive agreements to which, among other things, Boston
Financial Data Services, Inc., a Massachusetts corporation
(BFDS), and International Financial Data Services Limited, a
United Kingdom corporation (IFDS UK), will become wholly-owned
indirect subsidiaries of DST.
(DST) and/or certain subsidiaries, entered into a series of
definitive agreements to which, among other things, Boston
Financial Data Services, Inc., a Massachusetts corporation
(BFDS), and International Financial Data Services Limited, a
United Kingdom corporation (IFDS UK), will become wholly-owned
indirect subsidiaries of DST.
On March 27, 2017, DST entered into a definitive agreement (the
BFDS Reorganization Agreement), to which, among other things,
State Street Corporation, a Massachusetts corporation (State
Street), will contribute all of its interest in IFDS Realty, LLC,
a Massachusetts limited liability company, and shares of stock in
Vestmark, Inc., a Delaware corporation (Vestmark), to BFDS, in
exchange for shares of BFDS (the Reorganization). BFDS provides
shareholder recordkeeping, intermediary and investor services,
and regulatory compliance solutions to financial services clients
in the United States. DST currently owns a 50% interest in, and
State Street owns a 50% interest in, BFDS. The closing of the
Reorganization is subject to customary closing conditions set
forth in the Reorganization Agreement.
BFDS Reorganization Agreement), to which, among other things,
State Street Corporation, a Massachusetts corporation (State
Street), will contribute all of its interest in IFDS Realty, LLC,
a Massachusetts limited liability company, and shares of stock in
Vestmark, Inc., a Delaware corporation (Vestmark), to BFDS, in
exchange for shares of BFDS (the Reorganization). BFDS provides
shareholder recordkeeping, intermediary and investor services,
and regulatory compliance solutions to financial services clients
in the United States. DST currently owns a 50% interest in, and
State Street owns a 50% interest in, BFDS. The closing of the
Reorganization is subject to customary closing conditions set
forth in the Reorganization Agreement.
On March 27, 2017, West Side Investment Management, Inc., a
Nevada corporation and wholly-owned subsidiary of DST (West Side)
entered into a definitive agreement (the Exchange Agreement) to
which West Side will, following the Reorganization, acquire, in a
non-taxable transaction for U.S. federal income tax purposes,
State Streets interest in BFDS in exchange for 2,041,187 shares
of State Street common stock owned by West Side valued at $157.6
million (the Exchange), based on the closing share price for
State Street common stock as of March 24, 2017. At the closing of
the Exchange, BFDS will become a wholly-owned subsidiary of DST
(directly and through DSTs ownership interest in West Side). The
closing of the Exchange is subject to customary closing
conditions set forth in the Exchange Agreement.
Nevada corporation and wholly-owned subsidiary of DST (West Side)
entered into a definitive agreement (the Exchange Agreement) to
which West Side will, following the Reorganization, acquire, in a
non-taxable transaction for U.S. federal income tax purposes,
State Streets interest in BFDS in exchange for 2,041,187 shares
of State Street common stock owned by West Side valued at $157.6
million (the Exchange), based on the closing share price for
State Street common stock as of March 24, 2017. At the closing of
the Exchange, BFDS will become a wholly-owned subsidiary of DST
(directly and through DSTs ownership interest in West Side). The
closing of the Exchange is subject to customary closing
conditions set forth in the Exchange Agreement.
On March 27, 2017, DST entered into a definitive agreement (the
IFDS UK Purchase Agreement) to which, among other things DST
indirectly purchased (i) all of the issued and outstanding stock
of IFDS Percana Group Limited, a company organized under the laws
of Ireland (Percana) indirectly held by International Financial
Data Services Limited Partnership, a Massachusetts limited
partnership (IFDS LP), which is jointly owned by DST and State
Street, (ii) State Streets 50% interest in IFDS UK (the SST- IFDS
UK Interest), from State Street and (iii) all of the membership
interests of IFDS Realty UK, LLC, a Delaware limited liability
company, directly held by IFDS LP, for a combined $175.0 million
in cash. Prior to the sale of State Streets STT-IFDS UK Interest,
DST owned a 50% interest in, and State Street owned a 50%
interest in, IFDS UK. Percana, IFDS UK, and IFDS Realty UK, LLC
became wholly-owned subsidiaries (directly and indirectly) of DST
following the closing of the transactions contemplated by the
IFDS UK Purchase Agreement.
IFDS UK Purchase Agreement) to which, among other things DST
indirectly purchased (i) all of the issued and outstanding stock
of IFDS Percana Group Limited, a company organized under the laws
of Ireland (Percana) indirectly held by International Financial
Data Services Limited Partnership, a Massachusetts limited
partnership (IFDS LP), which is jointly owned by DST and State
Street, (ii) State Streets 50% interest in IFDS UK (the SST- IFDS
UK Interest), from State Street and (iii) all of the membership
interests of IFDS Realty UK, LLC, a Delaware limited liability
company, directly held by IFDS LP, for a combined $175.0 million
in cash. Prior to the sale of State Streets STT-IFDS UK Interest,
DST owned a 50% interest in, and State Street owned a 50%
interest in, IFDS UK. Percana, IFDS UK, and IFDS Realty UK, LLC
became wholly-owned subsidiaries (directly and indirectly) of DST
following the closing of the transactions contemplated by the
IFDS UK Purchase Agreement.
On March 27, 2017, DST entered into a definitive agreement (the
Joint Marketing Agreement) to which State Street Bank and Trust
Company, a Massachusetts trust company (SSB) may refer to BFDS
certain opportunities to provide transfer agency services, and
DST may refer to SSB certain opportunities to provide custody,
mutual fund accounting and fund administration services. In
addition, subject to certain exceptions, neither DST nor its
affiliates will (1) provide transfer agency services in the U.S.
bundled with any custody, mutual fund accounting and fund
administration services provided by certain third parties; or (2)
permit DSTs TA2000 system to be used by those third parties to
provide transfer agency services. The term of the Joint Marketing
Agreement is five years.
Joint Marketing Agreement) to which State Street Bank and Trust
Company, a Massachusetts trust company (SSB) may refer to BFDS
certain opportunities to provide transfer agency services, and
DST may refer to SSB certain opportunities to provide custody,
mutual fund accounting and fund administration services. In
addition, subject to certain exceptions, neither DST nor its
affiliates will (1) provide transfer agency services in the U.S.
bundled with any custody, mutual fund accounting and fund
administration services provided by certain third parties; or (2)
permit DSTs TA2000 system to be used by those third parties to
provide transfer agency services. The term of the Joint Marketing
Agreement is five years.
On March 27, 2017, DST also entered into a certain termination
agreement (the Termination Agreement) and other ancillary
agreements. The Termination Agreement terminates the following
material definitive agreements:
agreement (the Termination Agreement) and other ancillary
agreements. The Termination Agreement terminates the following
material definitive agreements:
|
1.
|
Amended and Restated Joint Venture Agreement, by and
between DST and State Street, dated as of October 31, 2006, as amended, to which DST and State Street jointly governed BFDS. Such termination will be effective as of, and automatically upon, the closing of the Reorganization. |
|
2.
|
Share Transfer Restriction and Option Agreement, by and
between DST and State Street, dated as of December 23, 1992, relating to restrictions on the transfer of shares of International Financial Data |
Services Limited prior to 1995 and a mutual right of first
refusal on transfers of such shares after 1995. Such termination
will be effective as of the date hereof; and
refusal on transfers of such shares after 1995. Such termination
will be effective as of the date hereof; and
|
3.
|
Agreement, by and among State Street (f.k.a State Street
Boston Corporation), DST Systems International B.V., a Netherlands corporation, and International Financial Data Services Limited (f.k.a. Clarke Tilley Limited), dated December 23, 1992, to which DST and State Street jointly governed International Financial Data Services Limited. Such termination will be effective as of the date hereof. |
No penalties for early termination will be incurred by the
termination of any of the above agreements. The Termination
Agreement also terminates certain agreements made in the ordinary
course of business by and between or among DST, State Street,
BFDS, and SSB, effective as of, either the date hereof or and
automatically upon the closing of the transactions contemplated
by the Exchange Agreement.
termination of any of the above agreements. The Termination
Agreement also terminates certain agreements made in the ordinary
course of business by and between or among DST, State Street,
BFDS, and SSB, effective as of, either the date hereof or and
automatically upon the closing of the transactions contemplated
by the Exchange Agreement.
Joseph L. Hooley, the chairman and chief executive officer of
State Street, is the brother of DSTs Chief Executive Officer
Stephen C. Hooley and a related person. The BFDS and IFDS
transactions were approved by the independent Corporate
Governance/Nominating Committee of the DST Board of Directors.
State Street, is the brother of DSTs Chief Executive Officer
Stephen C. Hooley and a related person. The BFDS and IFDS
transactions were approved by the independent Corporate
Governance/Nominating Committee of the DST Board of Directors.
The above descriptions of the BFDS Reorganization Agreement, the
Exchange Agreement, the IFDS UK Purchase Agreement, the Joint
Marketing Agreement and the Termination Agreement are qualified
in their entirety by the terms of the BFDS Reorganization
Agreement, the Exchange Agreement, the IFDS UK Purchase
Agreement, the Joint Marketing Agreement and the Termination
Agreement, which are attached hereto as Exhibit 10.1, Exhibit
10.2, Exhibit 10.3, Exhibit 10.4 and Exhibit 10.5, respectively,
and incorporated herein by reference.
Exchange Agreement, the IFDS UK Purchase Agreement, the Joint
Marketing Agreement and the Termination Agreement are qualified
in their entirety by the terms of the BFDS Reorganization
Agreement, the Exchange Agreement, the IFDS UK Purchase
Agreement, the Joint Marketing Agreement and the Termination
Agreement, which are attached hereto as Exhibit 10.1, Exhibit
10.2, Exhibit 10.3, Exhibit 10.4 and Exhibit 10.5, respectively,
and incorporated herein by reference.
ITEM 1.02 Termination of a Material Definitive Agreement
The information regarding the Termination Agreement set forth in
Item 1.01 to this report is hereby incorporated by reference into
this Item 1.02.
Item 1.01 to this report is hereby incorporated by reference into
this Item 1.02.
ITEM 7.01 Regulation FD Disclosure
On March 27, 2017, DST issued a press release announcing the
entry into definitive agreements with respect to the acquisition
by it and/or its subsidiaries of the remaining interest in the
BFDS and IFDS UK joint ventures. A copy of the press release is
furnished herewith as Exhibit 99.1. The information contained in
Exhibit 99.1 shall not be deemed filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the Exchange
Act), or otherwise subject to the liability of that section, and
shall not be incorporated by reference into any registration
statement or other document filed by the Registrant under the
Securities Act of 1933, as amended, or the Exchange Act.
entry into definitive agreements with respect to the acquisition
by it and/or its subsidiaries of the remaining interest in the
BFDS and IFDS UK joint ventures. A copy of the press release is
furnished herewith as Exhibit 99.1. The information contained in
Exhibit 99.1 shall not be deemed filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the Exchange
Act), or otherwise subject to the liability of that section, and
shall not be incorporated by reference into any registration
statement or other document filed by the Registrant under the
Securities Act of 1933, as amended, or the Exchange Act.
The Company is posting an investor presentation to its website at
investors.dstsystems.com. The Company may use the investor
presentation from time to time in conversations with investors,
analysts and others. The Company is furnishing the information
contained in Exhibit 99.2 to Regulation FD. Such information is
furnished to Item 7.01, including Exhibit 99.2 hereto, and shall
not be deemed to be filed for the purposes of Section 18 of the
Securities Exchange Act of 1934 (the Exchange Act), or otherwise
subject to the liabilities of that section, nor shall it be
deemed to be incorporated by reference in any filing under the
Securities Act of 1933 or the Exchange Act, except as expressly
set forth by specific reference in such filing.
investors.dstsystems.com. The Company may use the investor
presentation from time to time in conversations with investors,
analysts and others. The Company is furnishing the information
contained in Exhibit 99.2 to Regulation FD. Such information is
furnished to Item 7.01, including Exhibit 99.2 hereto, and shall
not be deemed to be filed for the purposes of Section 18 of the
Securities Exchange Act of 1934 (the Exchange Act), or otherwise
subject to the liabilities of that section, nor shall it be
deemed to be incorporated by reference in any filing under the
Securities Act of 1933 or the Exchange Act, except as expressly
set forth by specific reference in such filing.
ITEM 9.01 Financial Statements and Exhibits.
|
(d)
|
Exhibits.
|
|||
|
Exhibit
|
Description
|
|||
|
10.1
|
BFDS Reorganization Agreement, dated March 27, 2017, by
and among DST, State Street, BFDS and IFDS LP |
|||
|
10.2
|
Exchange Agreement, dated March 27, 2017, by and among
West Side, State Street, and BFDS |
|||
|
10.3
|
IFDS Purchase Agreement, dated March 27, 2017, by and
among DST, DSTi Holdings Limited, DST Realty, Inc., IFDS LP, International Financial Data Services (Ireland) Limited, and State Street |
|||
|
10.4
|
Joint Marketing Agreement, dated March 27, 2017, by and
among State Street Bank and Trust Company, BFDS, and DST |
|||
|
10.5
|
Termination Agreement, dated March 27, 2017, by and
among DST, State Street, State Street Bank and Trust Company, and BFDS |
|||
|
99.1
|
Press release dated March 27, 2017
|
|||
|
99.2
|
Investor Presentation
|
|||
Safe Harbor Statement
Certain material presented in this report includes
forward-looking statements intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, (i) all statements, other than
statements of historical fact, included in this report that
address activities, events or developments that we expect or
anticipate will or may occur in the future or that depend on
future events, or (ii) statements about our future business plans
and strategy and other statements that describe the Companys
outlook, objectives, plans, intentions or goals, and any
discussion of future operating or financial performance. Whenever
used, words such as may, will, would, should, potential,
strategy, anticipates, estimates, expects, project, predict,
intends, plans, believes, targets and other terms of similar
meaning are intended to identify such forward-looking statements.
Forward-looking statements are uncertain and to some extent
unpredictable, and involve known and unknown risks, uncertainties
and other important factors that could cause actual results to
differ materially from those expressed or implied in, or
reasonably inferred from, such forward-looking statements.
Factors that could cause results to differ materially from those
anticipated include, but are not limited to, the risk factors and
cautionary statements included in the Companys periodic and
current reports (Forms 10-K, 10-Q and 8- K) filed from time to
time with the Securities and Exchange Commission. All such
factors should be considered in evaluating any forward-looking
statements. The Company undertakes no obligation to update any
forward-looking statements in this report to reflect new
information, future events or otherwise.
forward-looking statements intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, (i) all statements, other than
statements of historical fact, included in this report that
address activities, events or developments that we expect or
anticipate will or may occur in the future or that depend on
future events, or (ii) statements about our future business plans
and strategy and other statements that describe the Companys
outlook, objectives, plans, intentions or goals, and any
discussion of future operating or financial performance. Whenever
used, words such as may, will, would, should, potential,
strategy, anticipates, estimates, expects, project, predict,
intends, plans, believes, targets and other terms of similar
meaning are intended to identify such forward-looking statements.
Forward-looking statements are uncertain and to some extent
unpredictable, and involve known and unknown risks, uncertainties
and other important factors that could cause actual results to
differ materially from those expressed or implied in, or
reasonably inferred from, such forward-looking statements.
Factors that could cause results to differ materially from those
anticipated include, but are not limited to, the risk factors and
cautionary statements included in the Companys periodic and
current reports (Forms 10-K, 10-Q and 8- K) filed from time to
time with the Securities and Exchange Commission. All such
factors should be considered in evaluating any forward-looking
statements. The Company undertakes no obligation to update any
forward-looking statements in this report to reflect new
information, future events or otherwise.
About DST SYSTEMS, INC. (NYSE:DST)
DST Systems, Inc. (DST) is a provider of technology-based information processing and servicing solutions. The Company offers its solutions through unified data management, business processing and customer communications solutions to clients within the asset management, brokerage, retirement and healthcare markets. It operates in three segments: Financial Services, Healthcare Services and Customer Communications. Through the Financial Services segment, DST provides investor and asset distribution services to companies within the financial services industry. The Healthcare Services segment provides medical and pharmacy benefit solutions to aid information processing, quality of care, cost management and payment integrity needs. Within its Customer Communications segment, it offers integrated print, mail and electronic solutions. The Investments and Other segment constitutes of DST’s investments in equity securities, private equity investments, real estate and other financial interests. DST SYSTEMS, INC. (NYSE:DST) Recent Trading Information
DST SYSTEMS, INC. (NYSE:DST) closed its last trading session down -1.40 at 112.76 with 139,324 shares trading hands.
