A deeper bench

Insider: Mark Healy

Mark Healy: D.F. King purchase a response to issuer market shift towards an integrated service model

Who Mark Healy, president and CEO, CST Trust Co. (CST) and American Stock Transfer & Trust Co. (AST), part of the Australian-based Link Group.

Involvement This spring, AST bought D.F. King & Co. Inc., of New York, one of the most prestigious issuer and shareholder services firm in the world. For Healy, who joined AST in 2009, the deal ups the ante on a string of acquisitions that have helped the company grow from 325 to 1,800 employees while expanding its client base from 2,500 to 4,700 publicly traded companies. CST was founded in 2010 when AST bought the issuer services business of CIBC Mellon.

Listed Why is this purchase important to your company?

Mark Healy The D.F. King transaction was very important for us because it really brings a very long, institutional, deep knowledge base to our firm. We already had a presence within the Canadian markets servicing companies but, the reality here is, you have a very deep bench with D.F. King, you have a very broad diversity in terms of their knowledge base and the kind of relevance that they’ve had in the markets and their credibility is unparalleled.

Listed We’ve seen a lot of consolidation among transfer agents, proxy solicitors and other service providers. You’ve been at the centre of that. What’s the thinking behind it?

Mark Healy If you look at the market, the rationale for what’s driving this is the continued pressure on issuers as they look out at what’s being put at them, not only from potential shareholder or activist situations, but also regulatory environments, the need for technology investment, the need for a more integrated service model. And that’s really what we’ve now put together for these companies. We can service their integrated needs, both from a records administration perspective and all the things that happen from a transfer perspective, but also all of their shareholder needs, and now all the way through to the boardroom.

Listed Is that consolidation largely behind us?

Mark Healy You still have a few disparate areas that may become available at some point in time, but I think for financial services and the areas we service, you’ve seen most of the dance partners move around. Now it’s really about vertical growth, and bringing all these services to your clients.

Listed Is D.F. King well known in Canada?

Mark Healy It’s actually very well known globally in the industry. Instant recognition. That’s why we really don’t want to change that name, even though it’s part of ASTOne [the company’s integrated services brand], because there’s instant recognition, there’s instant credibility with that brand and what it brings.

Listed What does this deal mean to the Canadian market?

Mark Healy A couple of things. They’ve been supportive on a number of transactions in Canada in the past, for other solo providers. We are now clearly bringing them into the Canadian market in a more protracted way, so we’re going to actually have feet on the street, folks in Canada, as part of the King team, offering out our services, on a full-time basis now. Of course, D.F. King also has a European business. And those assets will be available as well for Canadian companies as they get involved in any kind of over-the-Atlantic transactions.

Listed Speaking in Toronto this January, you said you had been meeting with a number of companies, looking at possible deals. Was this one of them?

Mark Healy Yes, it was. D.F. King has many product lines; they also have a bankruptcy administration business. And they also have a couple of outsourcing businesses. So kind of pulling all those pieces together, including Europe, took a bit to get through.

Listed Are you currently working on any other deals?

Mark Healy We just acquired a small transfer agent out of Chicago, Illinois Stock Transfer, and we’re working on three other transactions that are hopefully culminating in the next few months, in the U.S. and Canada.

Listed Activity in the markets, IPOs, M&A and so on, hasn’t yet recovered to pre-crash levels. Do you see it coming back?

Mark Healy In the U.S., there are 40% fewer publicly traded companies than there were six years ago. They’ve either been acquired, gone bankrupt or privatized. We’ve yet to see the transcendence of those private companies back into the markets, and not all of them will. But some will come back through other venues, other private types of exchanges. I think in Canada you have similar demographics, albeit you didn’t have such a delisting issue, but you had kind of a pause in your capital market issuance and IPOs and I think you’re starting to see that pass. So I think over the next year or two you will have a lot of activity in the market and deeper activity.

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