American Stock Transfer & Trust Company, LLC (AST), announced that its affiliate, AST Fund Solutions, LLC (I first knew them as The Altman Group) has entered into a definitive agreement to purchase D.F. King & Co., Inc. and its operating businesses (D.F. King). When the transaction is finalized, the combined company will be the leading issuer and shareholder services firm across North America and Europe.
D.F. King, a market leader for issuer and shareholder services for over 70 years, will be integrated and operate immediately with ASTOneTM, a division of AST that offers a comprehensive array of proxy solicitation, ownership intelligence and corporate governance services. The combined business will offer the broadest array of specialized advisory services, including proxy solicitation, corporate governance, proxy contests and corporate actions. According to Mark C. Healy, President and Chief Executive Officer of AST:
Combining D.F. King with ASTOne reshapes the issuer and shareholder services business. It unifies respective strengths and creates a powerhouse of leadership and specialized advisory, operational and communications expertise under one roof. With continued focus on the rapidly growing needs of this sector, this transaction further advances our strategy to provide the most comprehensive offering to our clients with industry-leading innovation, client service and scale.
In addition to proxy solicitation and corporate governance advisory services, AST provides clients with a full range of issuer and shareholder services, including registrar and stock transfer, proxy solicitation, equity plan administration, corporate actions, asset recovery, ownership intelligence and investment management. Said Paul Torre, Executive Vice President of ASTOne:
Expanding our business capabilities with the acquisition of D.F. King is a sign of our commitment to this business and, more importantly, our clients. Uniting the expansive knowledge and reputable market presence of these two entities provides a powerful service offering to the industry, demonstrating AST’s dedication to innovative solutions.
D.F. King’s Chief Executive Officer Asher Richelli adds,
Demand for issuer services is driven by factors such as shareholder activism, the pace of new regulation and the increasing complexity of the global financial markets. We’re pleased to join AST in assisting issuers to meet these and other challenges with innovative, multi-faceted solutions and in creating the premier proxy solicitation and shareholder services provider in the industry. D.F. King became the market leader because of its dedication to providing unparalleled service to its clients. We bring that same passion and commitment to the AST platform.
As both companies are privately held, terms of the acquisition are not being disclosed. The transaction is expected to close within 30 days after the signing. I don’t follow the industry that closely, so here’s a bit of what David Bogoslaw wrote for Corporate Secretary (AST to acquire proxy solicitation firm DF King).
The transfer agent industry’s registered shareholder base has been declining by 5 percent annually, according to Carl T Hagberg & Associates, which has been driving a wave of consolidation and edging all but the largest providers out of the market. The DF King deal comes just three months after MDC Partners announced its acquisition of a majority partnership interest in Kingsdale Shareholder Services, the leading Canadian proxy solicitation firm based in Toronto.
The ongoing migration of shares from individual retail owners to mutual fund companies, multiple layers of ownership and rising demand for around-the-clock communication with issuers has made it increasingly challenging for firms like DF King to continue to fulfill their clients’ expanding needs.
And this just in from AST’s Mark Healy:
The deal is about a 70-year-old company with 1,000 clients and a 30-year-old company with 4,300 clients coming together to form the fastest-growing provider, behind Thomson Reuters and Ipreo, of the information all companies/issuers need in today’s environment of proxy fights and shareholder activists. As the economy improves, activists and dissidents are back in full force, not so much because firms are failing but because they are “hoarding” cash and not investing, so activists want buybacks, dividends, etc. Because of this, companies have to know who their shareholders are to protect themselves. The combined company will now offer integrated services with a major focus on ownership intelligence.
I hope the combined company does well but am concerned when I hear that companies need to” know who their shareholders are to protect themselves.” I wish companies needed to know their shareholders in order to be responsive to what they want.
AST and its affiliates in the Link Group network are leading providers of registry services and technology to financial market participants around the globe. AST and its affiliate, CST Trust Company (CST), form the North American division of the Link Group. Together AST and CST provide comprehensive stock transfer and employee plan services to more than 8,000 public issues and over 5.5 million shareholders. The division serves clients located throughout North America and in over 22 foreign countries, ranging in size from initial public offerings to Fortune 100 companies.
About ASTOneTM ASTOne integrates the expertise of AST Fund Solutions, AST Phoenix Advisors and AST Ownership Intelligence through a comprehensive proxy solicitation, investor relations and corporate governance consulting service offering. AST is the only transfer agent providing issuers with these integrated services at an operational level.
About D. F. King & Co., Inc.
Founded in 1942, D.F. King boasts industry-recognized expertise in proxy contests, tender offers and exchange offers for corporate control. For over 70 years, D.F. King has been one of the leading and most trusted providers of proxy and other stakeholder services in the U.S. Today, we are one of the leading proxy solicitation providers in the mutual fund industry.
comments like “companies have to know who their shareholders are to protect themselves” are typical in the proxy solicitation industry. Scaremongering seems to be common practice in order to secure future revenue in an industry that should be subject to tighter regulation. Proxy advisors often come under fire, well, quite frankly so should proxy solicitation firms. One of the reasons the industry is shrinking (apart from the 30+ players now fighting for business) is because issuers now realize that they can actually do the job themselves and reap the benefits internally in terms of relationship enhancement and cost saving.
I assume a lot depends on who is paying you. That’s where loyalties generally lie.
Yes, that may well be the case in the US. However in some European markets (in particular Southern Europe) some proxy solicitation firms happily leave loyalty and integrity to one side in favor of a fat pay check.