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Windsor financial services software company SS&C Technologies has reached a deal to acquire a New York-based technology provider with 150 employees.
SS&C has agreed to pay $100 million in cash and $20 million in stock for Innovest Systems, which also has locations in California and Texas.
The company builds systems that enable banks, retirement plan administrators and others to control, account for and report on assets held in trust, wealth, and retirement accounts, according to SS&C.
"In today's challenging market environment, it is our mission to deliver must-have technology and service to our clients to help them reach their target markets," Bill Stone, SS&C chairman and CEO, said in a statement. "The addition of Innovest's innovative solutions and seasoned team will allow us to simplify wealth managers' operations with a one-stop-shop for wealth and trust accounting and reporting."
The deal is slated to close in the current quarter.
SS&C announced the deal Thursday afternoon at the same time it released its first-quarter earnings, which, despite the ongoing COVID-19 pandemic, were stronger than they were a year ago.
Profits during the first three months of 2020 totaled $99.2 million, or 37 cents per diluted share, up nearly 23% from $80.8 million, or 31 cents, in the same period of 2019.
The company reported a 3.2% increase in revenue, which rose to $1.17 billion from $1.14 billion a year ago. Interest expense during the quarter was also lower, falling 24% from $101.6 million to $77.4 million.
Though its profits grew, the company pulled its prior 2020 earnings outlook, due to uncertainty created by the pandemic, which has 99% of its global workforce working from home.
“As long as the duration and scale of the pandemic and economic slowdown remains we expect markets to be volatile,” SS&C said. “The slowdown in the global economy will take time to recover.”
The company outlined several recovery scenarios, involving new sales and new fund launches returning to normal levels, and the impacts they could have on its financial picture.
With a recovery in the third quarter, SS&C projects its profits would be down just over 3% compared to its now-revoked guidance for the year. If the recovery comes in the fourth quarter, profits could be down by 5.6%. And if the recovery doesn’t come until early 2021, 2020 profits could be down 7.8%.
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