Deal Deep Dive: SS&C Bets on Synergies with Battea Acquisition

When SS&C acquired securities class action services company Battea in September, the fintech behemoth saw an opportunity to expand the business’s reach among its financial services clients and beyond. Battea, which is headquartered in Stamford, CT, is bringing over 100 employees and the company’s leadership under SS&C’s umbrella.

The company files and processes securities settlement claims in connection with antitrust and securities litigation lawsuits. Its clients include banks, hedge funds, asset managers and buy-side investors. “Battea is optimally positioned to help clients navigate the increasingly complex process of obtaining trustworthy information about litigation settlements that impacts their investments and businesses,” a press release from SS&C said. The business, which also has an office in Copenhagen, is coming into the fold of SS&C’s fund administration business GlobeOp.

The purchase price on the deal was $670 million in debt and cash, of which $650 million was through a Term Loan A privately placed with a direct lender.

“Public companies get a lot of securities class action lawsuits. Battea’s expertise is working with their clients to file with the courts and maximizing recoveries,” explains Bill Stone, CEO of SS&C in an interview with Middle Market Growth. “Battea has 900 clients. We have 22,000. We can give them more leads,” he adds.

Battea has 900 clients. We have 22,000. We can give them more leads.

Bill Stone

SS&C

SS&C became familiar with Battea around five years ago through Battea’s relationship with Eze Software, SS&C’s investment management offering.

Stone says that while private equity is competitive and has a lot of dry powder, strategics like SS&C can win when there is a strong case for synergies. “In general, if it’s something we want, we can outbid them because we have synergies,” he says, adding that SS&C can take over the back office, admin, finance and HR functions of the businesses it acquires.

Credit ratings agency Moody’s published a research note on SS&C in September saying it maintains its Ba2 “stable” rating on SS&C’s debt, despite the increase through the Battea acquisition. “The acquisition does not change the rating, despite a relatively high acquisition multiple, integration costs and the fact that it will mostly be funded with debt,” Moody’s said. At the time, the ratings agency expected SS&C’s debt to rise to 3.6x from 3.4x. “The acquisition has longer-term positive implications despite the small scale of the target. The acquired business is synergistic with SS&C fund administration offerings, and provides cross selling opportunities into SS&C’s hedge fund and asset management client base, as well as international expansion potential,” Moody’s continued.

On an SS&C earnings call in October, Stone said that Battea had about $95 million in annual revenue and a 45% EBITDA margin and was growing at a rate in the high single digits rate.

“The acquisition by SS&C creates opportunities and access to a much larger swath of clients between GlobeOp and SS&C overall,” Mike McCreesh, CEO of Battea and managing director at SS&C, says in an interview. “SS&C gives us the opportunity to engage with clients all over the world,” he added, noting that the firm is present in 40 countries worldwide.

Bhagesh Malde, global head of SS&C GlobeOp, said in November that SS&C was migrating Battea unto its platform and expected it to be a smooth transition since the two companies use the same technology stack. Malde added that SS&C was excited about getting to know the Battea business and cross selling its products. “Mike is training our generalist sales force. They’re incentivized to find opportunities for Battea,” he said. The firm also plans to add product specialists and salespeople focused specifically on Battea in Europe, Asia and the U.S.

TowerBrook Capital Partners previously held a minority stake in Battea since 2021. Investment bank KBW advised Battea on its sale to SS&C. “We had a great experience with KBW. They seemed to get our business right away and they vibed with the way we wanted to present ourselves,” McCreesh says. Malde added that KBW was very responsive on any questions SS&C executives had throughout the sale process. Davis Polk was the legal advisor to SS&C in the transaction while Sidley Austin worked with Battea.

Anastasia Donde is Middle Market Growth’s senior editor.

Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.