Item 1.01. Entry into a Material Definitive Agreement.
On January 11, 2018, DST Systems, Inc.,
a Delaware corporation (the “
Company
”), entered into an Agreement and Plan of Merger (the “
Merger Agreement
”)
with SS&C Technologies Holdings, Inc., a Delaware corporation (“
Parent
”), and Diamond Merger Sub, Inc.,
a Delaware corporation and an indirect wholly owned subsidiary of Parent (“
Merger Sub
”), pursuant to which,
among other things, Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of
Parent (the “
Merger
”).
At the effective time of the Merger (the
“
Effective Time
”), each share of common stock, par value $0.01 per share, of the Company (the “
Common
Stock
”) issued and outstanding immediately prior to the Effective Time (other than (i) shares to be canceled or converted
into shares of the Surviving Corporation, (ii) Company Options, shares of Company RSUs and Company Performance Stock Units, in
each case, as defined in the Merger Agreement, and (iii) any shares of Common Stock held by any holder who has not voted in favor
of the Merger and who is entitled to demand and properly demands appraisal of such Common Stock under Delaware law) shall be converted
into the right to receive $84.00 in cash, without interest (the “
Merger Consideration
”).
Consummation of the Merger is subject to
certain customary conditions, including, without limitation, (i) the approval by the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to vote (the “
Company Stockholder Approval
”) at
the Company stockholders meeting to approve the Merger (the “
Company Stockholder Meeting
”); (ii) the receipt
of approvals, or the expiration or termination of waiting periods under, certain regulatory laws or from certain regulatory authorities
(including the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, approval under the competition law
of Ireland and approvals of the Financial Industry Regulatory Authority, the United Kingdom’s Financial Conduct Authority,
the Central Bank of Ireland and Luxembourg’s Commission de Surveillance du Secteur Financier); and (iii) the absence
of any judgment, order, injunction, ruling or decree, preliminary, temporary or permanent, or other legal restraint or prohibition
and no action, proceeding, binding order or determination by any governmental entity, preventing or otherwise making illegal the
consummation of the Merger. Each party’s obligation to consummate the Merger is subject to certain other conditions, including
(a) the accuracy of the other party’s representations and warranties and (b) the other party’s compliance
with its covenants and agreements contained in the Merger Agreement (in each case, subject to certain qualifications).
The Company has made customary representations
and warranties in the Merger Agreement and has agreed to customary covenants, including with respect to, among other things, the
operation of the business of the Company and its subsidiaries prior to the closing, convening and holding the Company Stockholder
Meeting and, subject to certain customary exceptions, recommending that the Company’s stockholders vote to adopt the Merger
Agreement and approve the Merger at the Company Stockholder Meeting. In addition, the Merger Agreement contains a customary “no
shop” provision that, in general, prohibits the Company’s soliciting alternative acquisition proposals and, subject
to a customary “fiduciary out” exception, providing non-public information in connection with, and engaging in discussions
or negotiations regarding, unsolicited alternative acquisition proposals.
The Merger Agreement contains certain customary
termination rights for the Company and Parent. Subject to certain limitations, the Merger Agreement may be terminated by either
Parent or the Company if (i) the Merger is not consummated on or before six (6) months after the signing date, which is subject
to extension for an additional four (4) months by either party if all conditions are satisfied other than regulatory approvals
(the “
End Date
”), (ii) upon the issuance by any governmental entity of a legal restraint making the transactions
illegal which is final and non-appealable and (iii) if the Company Stockholder Approval is not obtained at the Company Stockholder
Meeting or any adjournment or postponement thereof at which the vote was taken. In addition, (a) Parent may terminate the Merger
Agreement prior to the Company Stockholder Meeting in the event that the Company’s board of directors fails to make, withdraws,
qualifies or modifies (or agrees to do any of the foregoing with respect to) its recommendation that its stockholders approve and
adopt the Merger Agreement (an “
Adverse Recommendation Change
”) and (b) subject to certain rights of Parent,
following receipt of a Superior Proposal (as defined in the Merger Agreement) the Merger Agreement may be terminated by the Company
prior to receipt of the Company Stockholder Approval, in order to enter into a definitive written agreement providing for such
Superior Proposal.
Upon termination of the Merger Agreement
under specified circumstances, including with respect to the Company’s entry into an agreement with respect to a Superior
Proposal, and as a result of the Company’s board of directors making an Adverse Recommendation Change prior to the receipt
of the Company Stockholder Approval, the Company will be required to pay Parent a termination fee of $165,000,000.
Further, if the Merger Agreement is terminated
because the Merger is not consummated by the End Date or if the Company Stockholder Approval has not been obtained and prior
to such termination but after the date of the Merger Agreement an alternative acquisition proposal shall have been made by a third
party to the Company or publicly announced or shall have been made directly to the Company’s stockholders, and within 9 months
after the date of such termination the Company consummates certain alternative acquisition proposals, enters into an agreement
to consummate certain alternative acquisition proposals or recommends certain alternative acquisition proposals, then the Company
shall be obligated to pay the termination fee of $165,000,000.
Parent has secured committed debt financing
from two banks of international reputation providing Parent with sufficient cash, together with other sources of funds immediately
available to Parent, to consummate the Merger, pay all related fees and expenses with respect to the Merger, and repay the Company’s
indebtedness required to be repaid at closing. Parent has agreed to use reasonable best efforts to obtain the financing; however,
consummation of the Merger is not conditioned on Parent or Merger Sub obtaining any equity or debt financing. The Company will
perform any obligations under the Company Notes (as defined in the Merger Agreement) arising out of the consummation of the Merger,
including delivering the notice of a control event to the holders, using reasonable best efforts, as directed by Parent, to obtain
certain amendments and sending an irrevocable notice of redemption on the closing date.
The representations, warranties, covenants
and agreements of the Company contained in the Merger Agreement have been made solely for the benefit of Parent and Merger Sub.
In addition, such representations, warranties and covenants (i) have been made only for purposes of the Merger Agreement;
(ii) have been qualified by (a) except for certain representations and warranties, certain matters set forth in the Company’s
filings with the Securities and Exchange Commission on or after January 1, 2015 and prior to the date of the Merger Agreement and
(b) confidential disclosures made to Parent and Merger Sub in the disclosure letter delivered in connection with the Merger
Agreement; (iii) are subject to certain materiality qualifications contained in the Merger Agreement, which may differ from
what may be viewed as material by investors and (iv) were made only as of the date of the Merger Agreement and, in the event
that the closing occurs, as of the date of the closing, or such other date as is specified in the Merger Agreement. Accordingly,
the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger
Agreement, and not to provide investors with any other factual information regarding the Company or its business. Investors are
not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or
any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their
respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may
change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s
public disclosures.
The foregoing summary of the Merger Agreement
and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by,
the full text of the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference.