S&P puts SS&C Technologies on negative watch

S&P said it placed the BB corporate credit rating on SS&C Technologies Inc. on CreditWatch with negative implications.

The CreditWatch placement follows news that SS&C intends to acquire DST Systems Inc.

S&P said it expects the transaction to be almost exclusively debt funded with a potential for partial equity financing, resulting in adjusted leverage exceeding 5x at transaction close under currently proposed capital structures.

Although SS&C has an established track record of successfully integrating large acquisitions while paying down debt, given the scale of the incremental debt and a three-year timeline to deliver on the proposed $150 million run-rate cost savings plan, the agency said it views the potential for leverage to remain above the downside trigger of 5x for the 12 months following the transaction's close.

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