CSC offers $2B to acquire Dutch competitor
WILMINGTON – CSC, a leading global provider of business, legal, tax, and digital brand services, has reached a conditional agreement to acquire a Dutch competitor for more than $2 billion in a deal that would significantly boost its global presence and offerings.
The Dec. 6 deal for Intertrust, a publicly traded company that also provides tech-enabled fund and corporate solutions around the world, would be an enormous growth acquisition for the private CSC, which is headquartered in Little Falls just west of Wilmington. It would more than double the company’s workforce around the world.
Founded in 1899, CSC has 3,000 employees in 13 countries worldwide, with nearly half based in Delaware. It has more than 180,000 corporate clients — including 90% of the Fortune 500 — as well as nearly 10,000 law firms and more than 3,000 financial institutions.
Since 2002, CSC has made more than 25 acquisitions, primarily smaller niche servicers and regional providers that have helped build out its offerings and footprint. As a private company, CSC has rarely disclosed its acquisition prices for companies, but it’s likely that Intertrust is the most expensive deal in the company’s history, surpassing its 2014 deal for LexisNexis Document Services and 1994 deal for rival Prentice Hall.
The combined CSC-Intertrust company would be able to better compete with the registered agent industry’s largest provider, Corporation Trust Co., which also has a Wilmington office and is owned by giant Dutch firm Wolters Kluwer.
CSC said in a press release that the deal will establish the combined company “as the clear and differentiated leader for corporate, fund, private, and capital markets clients at a time that the market needs it most.”
“We have been following Intertrust’s growth and transformation for many years, while at the same time building and growing our trust and corporate services offering in the United States, scaling our fund administration and international expansion solutions globally, and providing a service model to our clients to enable them to navigate an increasingly complex international regulatory environment,” CSC CEO and President Rod Ward III said in a statement announcing the agreement. “We feel we present a unique opportunity unmatched in the market due to our business model, our people, our industry-leading and award-winning customer service, stability, continuity, and our passion for the complex.”
Intertrust is a 69-year-old firm based in Amsterdam with more than 4,000 employees working out of offices in 33 countries or territories – including an 11-year-old office at the Bellevue Park Corporate Center north of Wilmington. It reported revenue of about $690 million last year, with a net income of about $25 million.
The Dutch firm has grown over the past decade, with Blackstone Group having acquired the then-private Intertrust for a reported $883 million in 2013 – or about $1 billion in today’s value. Among its publicly known clients are FIFA, New York-based multinational investment bank Morgan Stanley, the Blackstone credit investment arm GSO Capital Partners, the Oman Investment Fund asset manager Rakiza, and New York fashion label Tory Burch.
Intertrust has been shopping for a buyer over the past few months having brokered an earlier $1.83 billion deal with British private equity firm CVC Capital Partners in November that was terminated on Dec. 1. Intertrust reportedly was in discussions with multiple buyers at price points up to 22 Euros per share, with CSC’s offer coming in at 20 Euros per share at a premium of 59% to its Nov. 11 close price, when it first announced its deal with CVC.
The highest bidder for the Dutch company reportedly left the seller with questions about its financing for the deal, turning Intertrust to the next highest bidder, CSC, which will pay for the all-cash deal through financing and free cash flow.
“In CSC we have found a long-term partner that is highly complementary to us, given its strong position in the United States and complementary service offerings. As a result, we will be able to offer a wider breadth of services to our clients in even more geographical locations,” Intertrust CEO Shankar Iyer said in a statement. “The combination will enable us to strengthen our position as a leading tech-enabled Corporate and Fund Services provider and accelerate our transformation by expediting digitalization initiatives. Moreover, founded in 1899, CSC has a strong reputation with similar cultural values and focus to Intertrust.”
The terms of the proposed deal laid out for European investors restrict CSC from divesting any of Intertrust’s parts for at least two years after settlement without approval from a supervisory board. The deal needs approval from Intertrust’s shareholders as well as regulatory agencies, including the Federal Trade Commission, however, the parties expect the deal to close in the second half of 2022. A formal acquisition proposal is expected to be submitted to Intertrust by February at the latest.