State Street to Acquire Charles River Development for $2.6 Billion


Charles River Development is a Premier Provider of Investment Management Front Office Tools and Solutions

Acquisition Complements State Street’s Existing Back, Middle and Front Office Capabilities to Enable First-Ever Global Front-to-Back Client Servicing Platform1

Acquisition Expected to be Accretive in 2020 and Offers Long-Term Revenue Growth and Cost Reduction Opportunities2

State Street Corporation (NYSE:STT) today announced that it has entered into a definitive agreement to acquire Charles River Systems, Inc. (Charles River Development), a premier provider of investment management front office tools and solutions. Under the terms of the agreement, State Street will purchase Charles River Development in an all cash transaction for $2.6 billion. The acquisition, which is subject to regulatory approvals and customary closing conditions, is expected to be completed in the fourth quarter of 2018.

When integrated with State Street’s existing front, middle and back office capabilities, Charles River Development’s front-office systems will enable State Street to deliver a global front-to-back platform for asset managers and asset owners that will be unique in the investment servicing industry. This interoperable platform, supported by deep enterprise data management capabilities, will enable investment workflows, provide advanced data aggregation, analytics and compliance tools, and connect and exchange data with other industry platforms and providers.

“Today’s announcement represents an important milestone in our digital and technology transformation aimed at providing clients with differentiated solutions and data. This acquisition will also enable us to address a large adjacent $8 billion revenue pool for front office services,” said Jay Hooley, chairman and CEO of State Street. “Clients today want solutions that can add value and achieve efficiencies from portfolio modeling and construction all the way through to custody as they face increasing complexity and regulatory expectations, and the need to manage costs and achieve product or geographic expansion.”

Charles River Development is a privately held company headquartered in Burlington, Massachusetts with offices in North America, Europe and the Asia-Pacific region. With total revenues of more than $300 million in 2017, its primary focus is providing solutions that automate front and middle office investment management functions across asset classes on a single platform. Today, Charles River Development serves more than 300 clients across institutional, wealth, asset owner and alternative market segments, including 49 of the top 100 asset managers that in aggregate have more than $25 trillion in assets under management.3

“State Street is an ideal partner for us as we share a common focus on helping clients achieve better investment outcomes,” said Charles River Development CEO Peter Lambertus. “We are excited about the opportunities ahead and what the combination of our two firms can do for the industry overall.”

“This acquisition represents not only a significant investment in our future but also the recognition that the ability to assist clients in managing their data needs and extract insights from their data is increasingly the most important differentiator for our industry,” said Ron O’Hanley, president and chief operating officer of State Street. “Our interoperable platform will enable clients to integrate and align their preferred systems utilizing State Street provided data, and access liquidity, insights, data and technology infrastructure. We are confident that this acquisition will enable us to deepen and grow our client base and deliver positive results for our shareholders.”

The $2.6 billion purchase price is expected to be financed through the suspension of approximately $950 million of share repurchases in the second quarter of 2018 and during the remainder of 2018, and, subject to market conditions, the remainder of the purchase price through the issuance of equity, with approximately two-thirds of such equity expected to be in the form of common stock and one-third in preferred stock.

State Street yesterday announced an increase to its quarterly common stock dividend for the third quarter of 2018 to $0.47 per share, an increase of 12 percent over the second quarter of 2018. The acquisition is expected to be accretive to earnings in 2020, excluding acquisition and restructuring costs and based on anticipated revenue growth and cost synergies. The Charles River Development acquisition was included in CCAR as a potential strategic change and the Fed granted a conditional non objection.

State Street’s second quarter financial results will be released on Friday, July 20, 2018 and reviewed, along with the proposed acquisition, via webcast and teleconference at 8:00 a.m. EDT.

The conference call will be accessible on State Street’s Investor Relations website at and by telephone at +1 (877) 423-4013 (Conference ID# 5069567) inside the U.S. and +1 (706) 679-5594 (Conference ID# 5069567) outside the U.S. The press release announcing the second-quarter financial results, presentation materials referred to on the conference call, including both with respect to State Street’s financial results and the proposed acquisition of Charles River Development announced in this news release, and additional financial information will be available on State Street’s Investor Relations website prior to the conference call.

A replay of the conference call will be available for approximately two weeks following the conference call on State Street’s Investor Relations website and by telephone at +1 (855) 859-2056 (Conference ID# 5069567) inside the U.S. or +1 (404) 537-3406 (Conference ID# 5069567) outside the U.S.

Originally posted on Business Wire, for the complete press release:


State Street Corporation
Ilene Fiszel Bieler, +1 617-664-3477
Marc Hazelton, +1 617-513-9439