Kansas City-based DST Systems, with 4,000 area employees, announced Thursday it has agreed to a buyout by a Connecticut-based rival that values DST at $5.4 billion, including debt.
SS&C Technologies Holdings will pay $84 a share for DST, which provides data processing and other business services to companies in the financial services and health care sectors.
Word of a deal hit financial markets Wednesday and drove DST stock up more than 22 percent. DST shares climbed $4.03, or 5 percent, after the announcement and finished at $83.92. Trading near the deal price suggests that financial markets were confident that the sale would go through.
The announcement said the purchase of DST continues SS&C’s “strategy of adding talented people and technology through acquisitions.” It also said the companies expected to generate cost savings of $150 million a year but would take until 2020 to generate that rate of savings. It did not indicate what role layoffs might play in cutting costs.
Mergers between companies with overlapping businesses often lead to cost cutting, in part through layoffs. DST employs 14,400 worldwide, and SS&C has 8,500 employees.