Computershare, the Australian share registration and trading technology company, has acquired EquiServe, one of the largest providers of transfer agent and employee stock plan services in the US, from DST Systems, Inc.
Upon closing, DST will receive US $216 million of cash plus 29.6 million shares of Computershare common stock. The Computershare common stock to be received represents slightly less than 5% of Computershare’s total issued capital, post-transaction, and had an approximate market value of US $91 million on 19 October 2004.
“This is the most momentous acquisition in Computershare’s history, both in size and strategic importance,” says Chris Morris, CEO and President of Computershare Limited. “Growing our business in the US has always been a critical part of our global strategy and this deal positions us as a leader in the US in both share registry and employee plans. Through this deal, we expect to achieve significant synergies that will benefit our customers and shareholders. With EquiServe’s prodigious customer list, the opportunity to offer our full suite of services will be greatly enhanced.”
Computershare says the deal will reinforce its position as one of the pre-eminent suppliers of transfer agent and employee plan services. The acquisition is planned for completion on 1 January 2005, depending on required regulatory approvals.
EquiServe is one of the largest corporate shareholder service providers in the US, offering a full range of transfer agent and employee plan administration services and provides these services to over half the thirty companies in the Dow Jones Industrial Average. In total, EquiServe has around 1,300 clients and provides services to almost 19 million shareholders. The employee plan administration business supports in excess of 1 million active employees. The primary processing facility is in Boston, Massachusetts, with additional major facilities in Jersey City and Edison, New Jersey, and Chicago, Illinois. “Our decision to sell EquiServe to Computershare anticipated the future needs of our clients, whose requests have expanded for ancillary and integrated services for employee plans, employee and shareowner communications and proxy services,” says Tom McDonnell, President and CEO of DST Systems, Inc. “omputershare is also uniquely positioned to support the global requirements of EquiServe’s clients. Computershare’s global business model and the value it will bring to EquiServe’s client base provides DST the value created by taking almost 30 million shares of Computershare as part of the consideration.”
Together, the combined companies will offer a full range of stakeholder services to issuers and private companies. “This acquisition comes closely behind the recent successful acquisitions of Georgeson Shareholder Communications, Alamo Direct and Transcentive and is an essential building block in achieving our vision of providing a full range of end-to-end solutions for our clients, their shareholders and employees,” says Steve Rothbloom, President of Computershare’s North American region.