DST To Sell NACC Business For $410 Mln; Authorizes New $300 Mln Share Buy Back

(RTTNews) - DST Systems, Inc. (DST), a provider of specialized technology, strategic advisory, and operations outsourcing, announced Tuesday that it has entered into a definitive agreement to sell its North American Customer Communications or NACC business to Broadridge Financial Solutions, Inc. (BR). The cash consideration is $410 million, subject to customary working capital and other closing adjustments.

The deal is expected to close in July, and follows the completion of a sale and leaseback transaction of three of DST's U.S. production facilities and its Canadian production facility announced in October 2015 for pre-tax proceeds totaling $129.0 million.

NACC, with over 2,300 employees and four production facilities is the largest transactional printer in North America.

Steve Hooley, Chairman and CEO of DST stated that the sale is an important step in executing the company's well-defined strategy of focus and growth within its financial and healthcare services segments.

DST estimates that the pending sale of the NACC business will result in after-tax proceeds of approximately $310.0 million. The Company intends to use its net after tax proceeds in accordance with its capital plan including investments in the business, share repurchases, strategic acquisitions, debt repayments and other corporate purposes.

Once completed, the North American Transaction is expected to result in a reduction to DST's earnings per share of approximately $1.15 on an annual basis, excluding any impacts of the use of proceeds from the sale.

Concurrent with the approval of the transaction, the Board of Directors of DST authorized a new $300.0 million share repurchase plan.

BofA Merrill Lynch is acting as financial advisor to DST and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.