State Street to buy Charles River Systems for $2.6bn
State Street will acquire Charles River Systems, a provider of investment management front office tools and solutions, for $2.6 billion.
The acquisition, which is subject to regulatory approvals and customary closing conditions, is expected to be completed in the fourth quarter of 2018.
State Street already has front, middle and back office capabilities, and will use Charles River’s front-office systems to offer a front-to-back platform for asset managers and asset owners.
According to State Street, this interoperable platform will enable investment workflows, provide data aggregation, analytics and compliance tools, and connect and exchange data with other industry platforms and providers.
Jay Hooley, chairman and CEO of State Street, says: “This acquisition will also enable us to address a large adjacent $8 billion revenue pool for front office services.”
Charles River is a privately held company headquartered in Burlington, Massachusetts with offices in North America, Europe and the Asia-Pacific region.
It had total revenues of more than $300 million in 2017, and currently has more than 300 clients across institutional, wealth, asset owner and alternative market segments.
Some of its clients include Glenmede Trust Company in the US and Bangkok Bank’s subsidiary, Bangkok Capital Asset Management (BCAP).
State Street states that the purchase price is expected to be financed through the suspension of approximately $950 million of share repurchases in the second quarter of 2018 and during the remainder of 2018, and, subject to market conditions, the remainder of the purchase price through the issuance of equity, with approximately two-thirds of such equity expected to be in the form of common stock and one-third in preferred stock.
