DST Announces Definitive Agreement with JanusAugust 25, 2003 KANSAS CITY, MO (August 25, 2003) - DST Systems, Inc. (NYSE: DST) announced today that it has entered into a definitive agreement with Janus Capital Group Inc. (NYSE: JNS) under which DST will acquire from Janus 32.3 million shares of DST common stock (27.9 % of the outstanding shares) in exchange for all of the stock of a DST subsidiary, DST Output Marketing Services, Inc. ("OMS"), which is part of DST’s Output Solutions segment. At the time of the exchange, OMS will hold an operating commercial printing and graphics design business and additional cash to equalize the value of the operating business and the DST shares being exchanged. OMS’s revenues for the year ended December 31, 2002 and the six months ended June 30, 2003 were $105.7 million and $44.5 million, respectively. OMS has approximately 420 employees. Janus and DST have agreed that the exchange value of the DST shares at closing will be determined based on the average price of DST common stock during the twenty trading day period prior to the close of the transaction, but at not less than $30.00 per share nor more than $34.50 per share. On this basis, and including the value of its other assets, OMS would have an approximate aggregate value of between $969 million to $1.114 billion, and its assets at closing would include cash of approximately $854 million to $999 million. DST and Janus have structured the transaction in accordance with Section 355 of the Internal Revenue Code. Accordingly, neither DST nor Janus expects to realize a taxable gain as a result of the exchange. Both parties will receive tax opinions from their tax advisors. DST intends to finance the transaction largely from the net proceeds of its recent $840 million convertible debenture offering, additional borrowings under bank credit facilities and from its other general corporate funds. Upon completion of the transaction, Janus will still own 7.4 million shares of DST common stock (approximately 9% of the outstanding shares, on a pro forma basis) but DST will hold a proxy to vote those shares. The transaction is intended to achieve important DST business objectives. DST believes the removal of significant ownership interest by Janus, which is a competitor to its mutual fund customer base, will improve its competitive position in the mutual fund industry. In addition, the substantial reduction in the Janus ownership will improve DST’s access to bank credit by eliminating aggregation of credit risks by lenders. The transaction will also address certain DST concerns about the lack of desired fit of the OMS operations with those of DST’s core output business. The definitive agreement is subject to a number of closing conditions, including DST stockholder approval, Hart-Scott-Rodino clearance and the receipt of final tax opinions. Subject to satisfaction of those conditions, the transaction is expected to close in the fourth quarter of 2003. * * * * The information and comments above may include forward-looking
statements respecting DST and its businesses. Such information and comments
are based on DST's views as of today, and actual results could differ.
There could be a number of factors affecting future results, including
those set forth in Form 8-K/A dated March 17, 2003 filed by DST with the
Securities and Exchange Commission. All such factors should be considered
in evaluating any forward-looking comment. The Company will not update
any forward-looking statements in this press release to reflect future
events. |