US-based outsourcing business DST Systems has agreed to acquire State Street's ownership stake in the Boston Financial Data Services (BFDS) joint venture and the International Financial Data Services (IFDS) joint venture in the UK.
BFDS offers shareholder recordkeeping, intermediary and investor services, along with regulatory compliance solutions to US financial services clients. IFDS UK is an investor and policy holder administrative services and technology provider to the collective funds, insurance, as well as retirement industries.
DST will acquire the BFDS stake from State Street for $158m and the IFDS UK stake for $175m. The outsourcing firm will become the 100% owner of the two entities following the completion of the deals.
DST said that the two deals together are expected to boost its operating income by $40m in the first year.
DST chairman, CEO and president Steve Hooley said: "These businesses have always been strategically important to DST and we are confident that we can drive significant enhancements to the client experience and improve execution of key initiatives, while unlocking meaningful synergies and enhancing value to DST and its shareholders."
State Street and DST will however retain their joint venture operating in Canada, Ireland and Luxembourg.
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State Street president Mike Rogers said: "This decision involves an ownership change, not a service-level change for our clients. We will continue to work with DST as it offers transfer agency services for our clients globally. This decision will also allow us to continue to focus on our core competencies and further invest in areas where we can expand market share or add product and service capabilities for our clients."