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SS&C Technologies Holdings 8-K Report, Material Agreement (Oct 1, 2024)

Reports
Acquisitions & Dispositions·Material Agreements·Financial Events+2
Filing Date
Filed October 1, 2024
Period End
September 27, 2024
Security
SSNC
In the record · 2016–202610-K1210-Q328-K107

SSNC filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 107 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’17Mar ’17
  2. Leadership change8-K · Aug ’19Aug ’19
  3. Deal closed8-K · Mar ’22Mar ’22
  4. Leadership change8-K · May ’26May ’26

01—Abstract

Summary

Summary of the 8-K filed October 1, 2024. Cited figures are marked; the original filing is the authoritative source.

SS&C Technologies Holdings, Inc. (Nasdaq: SSNC) reported in this Form 8-K, filed October 1, 2024, that on September 27, 2024 it completed its previously announced acquisition of Battea – Class Action Services, LLC.

A press release dated September 30, 2024 (Exhibit 99.1) describes the purchase price as approximately $670 milliona, subject to certain adjustments, and states that the company funded the purchase with a combination of debt and cash and expects the transaction to be accretive over the next 12 months. The release also says more than 100 Battea employees, based in Stamford, Conn., San Francisco and Copenhagen, joined SS&C, and that Battea serves over 900 banks, asset managers, hedge funds and proprietary trading firms. To help finance the deal, SS&C Technologies, Inc. borrowed $800 million in incremental Term A-9 loans under its existing April 16, 2018 credit agreement, with Morgan Stanley Senior Funding, Inc. as administrative agent.

The loans mature on the earlier of September 27, 2029 and a date tied to the maturity of the March 2019 Senior Notes or the Revolving Facility, subject to a $150 millionb outstanding threshold. Pricing is Base Rate plus 0.50% or Term SOFR plus 1.50%, with leverage-based step-ups and a step-down.

Amortization is 2.5% per annum for the first eight fiscal quarters, then 5.0% per annum, and a 5.25x consolidated net secured leverage maintenance covenant applies beginning with the quarter ending December 31, 2024. For investors, the filing shows a roughly $670 millionc acquisition funded in part by $800 million of new term debt, with the covenant and amortization terms defining the company's near-term leverage and cash flow obligations.

02—Key points

Key Highlights

  1. Completed the acquisition of Battea – Class Action Services, LLC on September 27, 2024, on the terms described in the company's September 12, 2024 Form 8-K.
  2. Purchase price is approximately $670 million, subject to certain adjustments, per the September 30, 2024 press release (Exhibit 99.1).
  3. Borrowed $800 million in incremental Term A-9 loans under the existing credit agreement; net proceeds were used in part to finance the acquisition, related fees and expenses, and working capital and general corporate purposes.
  4. Term A-9 loans bear interest at Base Rate plus 0.50% or Term SOFR plus 1.50%, with leverage-based step-ups of 0.25% above 3.50x and 4.25x consolidated net secured leverage, and a 0.125% step-down at or below 2.50x.
  5. Amortization of 2.5% per annum for the first eight fiscal quarters (starting with the quarter ending December 31, 2024), then 5.0% per annum, with the balance due at maturity on September 27, 2029 or an earlier springing date.
  6. A 5.25x consolidated net secured leverage maintenance covenant applies beginning with the fiscal quarter ending December 31, 2024, and may increase to 5.75x for four consecutive quarters following a material permitted acquisition.
  7. Management states the transaction is expected to be accretive over the next 12 months; more than 100 Battea employees joined SS&C.

03—Questions

Frequently Asked Questions

  1. What did SS&C acquire and when did the deal close?

    SS&C completed its acquisition of Battea – Class Action Services, LLC on September 27, 2024. Battea is described as a provider of securities class action claims and settlement recovery services, serving over 900 institutions.

  2. How much did SS&C pay and how was the deal funded?

    The purchase price is approximately $670 million, subject to certain adjustments. SS&C funded the purchase with a combination of debt and cash, and the filing states that $800 million of Term A-9 loans were borrowed in part to finance the acquisition.

  3. What are the key terms of the new Term A-9 loans?

    The loans mature on the earlier of September 27, 2029 or a date 91 days before the maturity of the March 2019 Senior Notes or the Revolving Facility if specified amounts remain outstanding. Interest is Base Rate plus 0.50% or Term SOFR plus 1.50%, subject to leverage-based adjustments. Principal amortizes at 2.5% per annum for the first eight fiscal quarters and 5.0% per annum thereafter.

  4. What financial covenant applies to the new loans?

    The Term A-9 loans carry a 5.25x consolidated net secured leverage ratio maintenance covenant beginning with the fiscal quarter ending December 31, 2024. At the borrower's option, the covenant may increase to 5.75x for four consecutive fiscal quarters following a material permitted acquisition.

  5. What does management expect from the acquisition?

    In the September 30, 2024 press release, SS&C states it expects the transaction to be accretive over the next 12 months and sees natural synergies between Battea and SS&C. More than 100 Battea employees, based in Stamford, Conn., San Francisco and Copenhagen, joined SS&C.

04—Continue

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