SS&C ups GlobeOp bid

Fund Administration
15 Mar, 2012

SS&C Technologies looks set to acquire GlobeOp following a £572 million offer for the firm.

The 485 pence per share offer is significantly higher than private equity firm TPG’s 435 pence per share bid, and has been welcomed by GlobeOp chairman Ed Nicoll. The deal will now be put forward to GlobeOp shareholders.

The GlobeOp bid is a latest in a flurry of activity from SS&C. It acquired the Dublin-based BDO Simpson Xavier Fund Administration Services in August 2011. In February 2012, it purchased Thomson Reuters’ PORTIA business, a middle-to-back office investment operations platform, for $170 million in a deal which is expected to close in the second quarter subject to regulatory approval.

Speaking last month, Peter Hughes, CEO of Apex Fund Services, said the SS&C bid was a surprise as the firm had repeatedly stated it wanted to expand into Europe, while the majority of GlobeOp’s clients are based in the US.  However, he added SS&C’s technology offering was certainly attractive to GlobeOp.

Some alternatives firms have expressed reservations about the deal although they appear to be adopting a “wait and see” approach. One manager acknowledged a takeover by SS&C would pose operational challenges, adding some managers might seek business elsewhere. However, the manager highlighted GlobeOp had been very communicative with clients about the whole saga. “Nevertheless, a counterbid by TPG cannot be ruled out just yet,” said the manager.

GlobeOp, which has $174 billion in Assets under Administration (AuA), put itself on the market as it felt its share value was significantly undervalued having plunged to below 300 pence from a 446 pence peak in March 2011. GlobeOp did not have a great 2011. During the summer, it was revealed BlueCrest Capital Management, the $26.8 billion hedge fund, was moving some of its fund administration business, worth around $5 billion, from GlobeOp to HSBC Securities Services.

This is the latest in a series of M&A activity in the fund administration space. Wells Fargo acquired LaCrosse Fund while Northern Trust purchased Omnium from Citadel. However, the market has been very difficult for all fund administrators regardless of size. Earlier this year, it was revealed HSBC was moving its US fund administration business to Ireland in a bid to control costs.


Written by Owen Dickson