Please ensure Javascript is enabled for purposes of website accessibility

Why SS&C Technologies and DST Systems Shares Climbed Today

By Anders Bylund - Updated Jan 10, 2018 at 4:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rumor has it that these companies are drawing up a merger plan, and SS&C has a long history of making smart acquisitions.

What happened

Shares of SS&C Technologies (SSNC -0.54%) rose as much as 14.1% on Wednesday, closing the day's trading session at a 12.8% gain. Investors in the financial software specialist applauded a Reuters report, showing that the company is in "advanced talks" to buy sector rival DST Systems (DST) in a $5 billion deal.

Two iPads showing some of SS&C's tools in action.

Image source: SS&C Technologies.

So what

Reuters' anonymous insider sources say that SS&C will pay $84 per DST share, all in cash. The merger would add DST's sizable footprint in the healthcare sector to SS&C's established success in the financial sector. The two companies' technology platforms could also benefit from a combination, borrowing features from each other to provide a more complete portfolio of solutions.

DST Systems shares climbed nearly 25% on the news and were trading just below the suggested buyout price at the end of the day.

Now what

SS&C has a long history of value-added buyouts, but DST Systems would be the company's largest acquisition to date. Keeping in mind that today's news is more of a rumor than a solid deal, a DST acquisition makes a ton of sense for SS&C and it's no surprise to see both stocks rising today.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SS&C Technologies Holdings, Inc. Stock Quote
SS&C Technologies Holdings, Inc.
$59.50 (-0.54%) $0.32
DST Systems, Inc. Stock Quote
DST Systems, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.