SS&C joins fintech bulge-bracket with $2.7 billion Advent acquisition
03 February 2015 | 4888 views | 0
SS&C is to buy Advent Software for $2.7 billion in cash in a bid to capitalise on a growing trend for outsourcing of software and services in the financial sector.
Advent has more than 4,300 customers including asset managers, hedge funds, fund administrators, prime brokers, family offices and wealth management advisory firms, located across more than 50 countries worldwide.
Headquartered in San Francisco, California, with more than 1200 employees worldwide, Advent generated revenues of $397 million for the 12 months ended 31 December, 2014.
SS&C has grown its business over the year through an aggressive acquisition strategy which has seen it undertake 40 take-overs to date, including GlobeOp in 2012 and DST Global Solutions in 2014.
The acquisition increases SS&C’s business and geographical diversification and scale and adds a stable and attractive revenue base, as demonstrated by Advent's 90% recurring revenue rates over the last five years. It is expected to generate savings of $45 million over the next three years and significant revenue synergies from the complementary business lines.
Bill Stone, SS&C chairman and CEO says the company will be speaking with all Advent customers over the coming weeks to lay out its plans for the combined business.
"SS&C is acquiring a pre-eminent business in the financial technology industry and this is an acceleration in the progression to cloud technology," he says.
Aite analyst Alois Pirker believes the new behemoth will have a number of strategic overlaps to sort out, likening it to globe-straddling powerhouses such as Thomson Reuters and SunGard.
"Portfolio management solutions have been part of SS&C since its acquisition of Financial Models Company in 2005 with additional capabilities having joined the firm through DST and now Advent Software. SS&C now also possesses a broad capability set when it comes to data management and aggregation. Let’s remember SS&C acquired Evare in 2009 and DST brought the Anova platform to the marriage," he points out. "While SS&C has plenty of opportunities at hand, it will also face the strategic issues that these size firms are facing … how to make the most of all the bits and pieces that are available?"