KANSAS CITY, Mo., March 9, 2018 /PRNewswire/ -- DST Systems, Inc. (the "Company" or "DST") (DST) today announced that it has commenced a consent solicitation (the "Consent Solicitation") from (i) holders of its outstanding 5.06% Series C Senior Notes due 2018 and 5.42% Series D Senior Notes due 2020 (the "2010 Notes") issued under the Note Purchase Agreement dated as of August 9, 2010 by and among the Company and the purchasers party thereto (the "2010 Note Purchase Agreement") (ii) holders of its outstanding 3.55% Series 2017A, Tranche A Senior Notes due 2023, 3.82% Series 2017A, Tranche B Senior Notes due 2025, 4.04% Series 2017A, Tranche D Senior Notes due 2028, 4.14% Series 2017A, Tranche E Senior Notes due 2030 and 4.29% Series 2017A, Tranche F Senior Notes due 2033 (the "2017 Notes" and, together with the 2010 Notes, the "Notes") issued under the Master Note Purchase Agreement dated as of November 14, 2017 by and among the Company and the purchasers party thereto (the "2017 Note Purchase Agreement" and, together with the 2010 Note Purchase Agreement, the "Note Purchase Agreements") and (iii) the purchasers of the 4.02% Series 2017A, Tranche C Senior Notes due August 6, 2025 to be issued under the 2017 Note Purchase Agreement (the "Tranche C Notes") to amend certain provisions of the Note Purchase Agreements to (1)(a) expressly provide for a conditional notice of redemption in certain circumstances, including with respect to consummation of the matters described in the previously announced Agreement and Plan of Merger dated as of January 11, 2018 by and among DST, SS&C Technologies Holdings, Inc. and Diamond Merger Sub, Inc. (the "Merger Agreement"), provided that the Make-Whole Amount (as defined in the Note Purchase Agreements) payable by the Company under an optional prepayment in connection with a Change in Control (as defined in the Note Purchase Agreements) resulting from the merger contemplated by the Merger Agreement (the "Merger") will be calculated using a redemption date that is 15 days after the consummation of the Merger and (b) allow the Company to send such notice of redemption not less than 5 days prior to the contemplated date for such prepayment, and (2) add defeasance and discharge provisions within the Note Purchase Agreements such that the Company's obligations under the Note Purchase Agreements and Notes shall be satisfied and discharged with respect to any Notes subject to an optional prepayment upon the payment or irrevocable deposit with a paying agent of the amounts payable in connection with such optional prepayment. DST is also seeking approval of the purchasers of the Tranche C Notes to terminate DST's obligation to issue the Tranche C Notes and its ongoing obligations under the 2017 Note Purchase Agreement (the "Termination Agreement").
In addition, DST has commenced a cash tender offer (the "Tender Offer") to purchase any and all of its outstanding Notes for a purchase price equal to 100% of the principal amount of such Notes, together with interest on such Notes accrued to, but not including, the date of prepayment, concurrently with and conditioned upon the closing of the Merger pursuant to the provisions of the respective Note Purchase Agreements.
The Tender Offer is being made to satisfy DST's obligations under the Note Purchase Agreements in connection with the pending Change in Control (as defined in the Note Purchase Agreements) that will result from the Merger. Settlement of the Tender Offer is conditioned on the consummation of the Merger.
Holders are not required to tender their Notes in the Tender Offer to deliver their consent to the Consent Solicitation.
The Consent Solicitation, the solicitation of approvals for the Termination Agreement and the Tender Offer are each being made pursuant to the Solicitation Statement and Offer to Purchase, dated March 9, 2018, and a related Transmittal Letter, which more fully set forth the terms and conditions of the Consent Solicitation, the Termination Agreement and the Tender Offer.
The Consent Solicitation and the solicitation of approvals for the Termination Agreement will each expire at midnight, New York City Time, on March 23, 2018, unless extended or earlier terminated (such time and date as it may be extended or earlier terminated with respect to either the Consent Solicitation or the solicitation of approvals for the Termination Agreement, the "Solicitation Expiration Date") and the Tender Offer will expire at midnight, New York City Time, on April 6, 2018, unless extended or earlier terminated (such time and date as it may be extended or earlier terminated with respect to the Tender Offer, the "Offer Expiration Date"), provided, however, that if any Notes are tendered and not withdrawn at the Offer Expiration Date, DST intends to extend the Tender Offer to midnight two business days prior to the closing date of the Merger. DST may change the Solicitation Expiration Date with respect to the Consent Solicitation or the solicitation of approvals for the Termination Agreement or the Offer Expiration Date with respect to the Tender Offer at any time.
The Tender Offer is contingent upon the satisfaction of certain customary conditions, including the consummation of the Merger. If any of the conditions are not satisfied, DST is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered Notes and may terminate the Tender Offer.
This press release does not constitute a notice of redemption under the optional redemption provisions of the Note Purchase Agreements, nor does it constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Important Additional Information and Where to Find It
In connection with the proposed merger, the Company has filed with the Securities and Exchange Commission ("SEC") a definitive proxy statement on February 27, 2018. The Company may also file other documents with the SEC regarding the proposed transaction. STOCKHOLDERS ARE URGED TO CAREFULLY READ THESE MATERIALS IN THEIR ENTIRETY (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The proxy statement and other relevant materials (when available), and any and all documents filed by the Company with the SEC, may be obtained for free at the SEC's website at www.sec.gov. In addition, stockholders may obtain free copies of the documents filed with the SEC by the Company via the Company's Investor Relations section of its website at www.dstsystems.com or by contacting Investor Relations by directing a request to the Company, Attention: Investor Relations, 333 W. 11th, 5th Floor, Kansas City, MO 64105, or by calling (816) 435-4925.
Participants in the Merger Solicitation
This press release does not constitute a solicitation of proxy, an offer to purchase or a solicitation of an offer to sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. The Company, its directors, executive officers and certain employees may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed merger. Information about the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of the Company's stockholders in connection with the proposed merger, and any interest they have in the proposed merger, is set forth in the definitive proxy statement, which was filed with the SEC on February 27, 2018. Additional information regarding these individuals is set forth in the Company's proxy statement for its 2017 Annual Meeting of Stockholders, which was filed with the SEC on March 24, 2017, and its Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which was filed with the SEC on February 28, 2018. These documents may be obtained for free at the SEC's website at www.sec.gov, and via the Company's Investor Relations section of its website at www.dstsystems.com.
Cautionary Statement Regarding Forward-Looking Statements
This document may include "forward-looking" statements, including, without limitation, statements relating to the completion of the merger. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "target," similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed merger and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements, including the failure to consummate the proposed merger or to make any filing or take other action required to consummate such merger in a timely matter or at all. The inclusion of such statements should not be regarded as a representation that any plans, estimates or expectations will be achieved. You should not place undue reliance on such statements. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, that: (1) the Company may be unable to obtain stockholder approval as required for the merger; (2) conditions to the closing of the merger, including obtaining required regulatory approvals, may not be satisfied or waived on a timely basis or otherwise; (3) a governmental entity or a regulatory body may prohibit, delay or refuse to grant approval for the consummation of the merger and may require conditions, limitations or restrictions in connection with such approvals that can adversely affect the anticipated benefits of the proposed merger or cause the parties to abandon the proposed merger; (4) the merger may involve unexpected costs, liabilities or delays; (5) the business of the Company may suffer as a result of uncertainty surrounding the merger or the potential adverse changes to business relationships resulting from the proposed merger; (6) legal proceedings may be initiated related to the merger and the outcome of any legal proceedings related to the merger may be adverse to the Company; (7) the Company may be adversely affected by other general industry, economic, business, and/or competitive factors; (8) there may be unforeseen events, changes or other circumstances that could give rise to the termination of the merger agreement or affect the ability to recognize benefits of the merger; (9) risks that the proposed merger may disrupt current plans and operations and present potential difficulties in employee retention as a result of the merger; (10) there may be other risks to consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all; and (11) the risks described from time to time in the Company's reports filed with the SEC under the heading "Risk Factors," including the Annual Report on Form 10-K for the fiscal year ended December 31, 2017, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and in other of the Company's filings with the SEC. Such risks include, without limitation: the effects of competition in the businesses in which the Company operates; changes in customer demand and the Company's ability to provide products and services on terms that are favorable to it; and the impacts of breaches or potential breaches of network, information technology or data security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on the Company's financial condition, results of operations, credit rating or liquidity. These risks, as well as other risks associated with the proposed merger, are more fully discussed in the definitive proxy statement that was filed with the SEC in connection with the proposed merger on February 27, 2018. There can be no assurance that the merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the merger will be realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which such statements were made. Except as required by applicable law, the Company undertakes no obligation to update forward-looking statements to reflect events or circumstances arising after such date.
DST Systems, Inc. (DST) is a leading provider of specialized technology, strategic advisory, and business operations outsourcing to the financial and healthcare industries. We assist clients in transforming complexity into strategic advantage by providing tools and services to help them stay ahead of and capitalize on ever-changing customer, business and regulatory requirements in the world's most demanding industries. For more information, visit the DST website at www.dstsystems.com.
Gregg Wm. Givens
Senior Vice President, Chief Financial Officer and Treasurer
DST Systems, Inc.
333 West 11th Street
Kansas City, MO 64105-1594
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