GlobeOp shareholders okay SS&C bid
SS&C Technology’s takeover bid of fund administrator GlobeOp has been accepted by 76.8% of GlobeOp’s shareholders.
The £572 million SS&C bid required approval from 70% of GlobeOp’s shareholders. Those shareholders which have not yet accepted the offer “(were) urged to do so immediately,” in a statement issued by SS&C. The offer will remain open “until further notice.” The merger will give the combined entity northwards of $300 billion in Assets under Administration (AuA).
The deal, however, has not been without its critics. “Integrating the systems and people will take a long time and I have concerns in the medium-term. I suspect there could also be senior level changes based on my experience of previous M&A deals. I have spoken to a lot of people who are genuinely concerned about how the deal is going to impact their business,” said one operational due diligence professional.
GlobeOp put itself on the market to boost its share price, which it felt was undervalued, earlier this year. SS&C’s higher bid in March 2012 trumped that of private equity firm TPG, who had announced interest in GlobeOp earlier in January. The operational due diligence expert said he would have preferred a TPG takeover of GlobeOp rather than a rival fund administrator as it would have meant “much less complication around economies of scale, locations, people and systems.”
A rival fund administrator, a not entirely disinterested party, said he would not be surprised if existing clients re-evaluated their relationships with either SS&C and GlobeOp “given the cultural differences which will need to be overcome.” The administrator said integrating the technology platforms would also pose challenges while smaller hedge funds could find themselves suffering a reduced service.
SS&C has been on a spending spree of late. In February 2012, it purchased Thomson Reuters’ PORTIA business, a middle to back office investment operations platform for $170 million, while in August 2011 it bought the Dublin-based BDO Simpson Xavier Fund Administration Services.
Many industry experts had predicted consolidation would be more prolific among smaller fund administrators. However, Goldman Sachs Administration Services, another top-tier provider, announced it too was on the market in April 2012, as part of the bank’s efforts to streamline its business.
Written by Owen Dickson