RANCHO CORDOVA, Calif.-DST Systems Inc. and USCS International Inc. announced an agreement to merge USCS with a wholly owned subsidiary of DST in a transaction valued at about $874 million. The deal is intended to be a tax-free reorganization accounted for as a pooling of interests.
Terms of the agreement-already approved by both companies’ boards of directors-call for each USCS shareowner to receive 0.62 shares of DST common stock for each share of USCS stock. The merger would significantly expand DST’s presence in the output-processing and customer-management software and services industries, the companies said.
The combined company is expected to generate about $1.1 billion in revenues, and to have approximately $1.1 billion in stockholders’ equity and 8,000 employees worldwide. It will provide services in the mutual fund shareowner processing, subscriber management services and output-processing industries, the companies said.
DST provides subscriber management services to DirecTV through its DBS Systems Corp. subsidiary. USCS’ International Billing Services Inc. subsidiary provides bill-presentation services. DST’s Output Technologies Inc. subsidiary provides output-related services to a diversified group of industries, primarily in the financial services sector.
