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After Eze Software Acquisition, SS&C Reshuffles Exec Team

Solution provider SC&C on Thursday used its second fiscal quarter 2018 financial report to unveil a new president and chief operating officer as the exec formerly in that role becomes the company's new vice chairman.

Just two days after announcing it would buy Boston-based Eze Software for $1.45 billion, solution provider SS&C Technologies Holdings on Thursday unveiled a change in its executive lineup with the appointment of a new president and chief operating officer.

Bill Stone, president and CEO of the Windsor, Conn.-based provider of investment and financial software enabled services and software, said that Rahul Kanwar has been promoted to the role of president and chief operating officer. Kanwar, who joined SS&C with the company's 2005 acquisition of Eisner LLP, had been serving as executive vice president and head of SS&C's Alternative Assets division.

Kanwar is taking over his new role from Normand Boulanger, who served in that position since 2004. Going forward, Boulanger will be SS&C's new vice chairman, and will have certain executive responsibilities as well, Stone said.

[Related: SS&C Plans To Buy Eze Software for $1.45B ]

"All three of us have worked closely together," he said.

For SS&C's second fiscal 2018 quarter, which ended June 30, the company reported GAAP revenue of $895.8 million, which was up 118 percent over the $411 million the company reported for its second fiscal 2017 quarter.

That included $741.6 million in software-enabled services, up from last year's $272.5 million, and license, maintenance, and related revenue of $154.2 million, up from last year's $138.5 million.

While revenue more than doubled in the quarter over the same period of last year, that included a $477.3-million revenue contribution from a couple of recent acquisitions, the largest of which is DST Systems, which SS&C acquired in mid-April, said Patrick Pedonti, SS&C chief financial officer.

Without the DST addition, organic revenue growth for SC&C on a constant currency basis was 3.7 percent, Pedonti said.

On a GAAP basis, SS&C also reported a net loss in its second fiscal quarter of $63.7 million, or 27 cents per share, compared to a net income the year before of $51.1 million, or 38 cents per share.

On a non-GAAP basis, net income was reported at $154.6 million, or 62 cents per share, up from last year's $96.2 million, or 46 cents per share.

SS&C's margins for the quarter took a hit of 21.8 percent during the second fiscal quarter of 2018 because of the DST acquisition, Pedonti said.

Looking forward, SS&C expects third fiscal quarter 2018 revenue of $992 million to $1.012 billion, with non-GAAP net income of between $162.0 million and $168.0 million. That compares to third fiscal quarter 2017 adjusted revenue of $419.6 million and non-GAAP net income of $105.5 million.

Pedonti said the third fiscal quarter 2018 figures include results from all acquisitions which closed by the third quarter. That does not include the acquisition of Eze Software, which is slated to close in the fourth quarter.

Stone, in response to an analyst question, said that the acquisition of DST brought SS&C a lot of really talented people, and that he expects that business to benefit from SS&C's distributed decision-making process in order to better take advantage of new opportunities.

"We like speed," he said. "We empower people."

The acquisition of DST Systems also resulted in the planned layoff of about 900 employees .

Another analyst asked whether SS&C's planned acquisition of Eze Software, unveiled last week with a value of about $1.45 billion, and following its $5.4-billion acquisition of DST Systems, means a shift in strategy for SS&C which until now has had more of a "tuck-in" acquisition strategy.

"No, I don't think so," Stone said.

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