Key Takeaways

  • Bill Stone scaled SS&C Technologies across nearly 100 acquisitions by eliminating duplicate corporate functions that buyout sponsors cannot remove.
  • In one transaction, SS&C paid $165 million for $11 million in EBITDA (a 15x entry multiple) and compressed the purchase multiple to just over 3x within twelve months by stripping out public company overhead.
  • Contested targets like Financial Models Company, GlobeOp, and Blue Prism fell to strategic bids because SS&C eliminated redundant legal departments, CFOs, auditor retainers, and stock exchange fees.
  • Canadian takeover rules require an interloper to offer a superior proposal around 20% over a signed deal, a statutory threshold Stone used to break sponsor exclusivity and force open bidding.

Stripping Public Overhead Compresses 15x Multiples to 3x

Bill Stone built SS&C Technologies by running directly at auctions where private equity firms thought they had an edge. With nearly 100 acquisitions completed, Stone relies on a clear structural advantage: financial buyers acquire assets as standalone platforms that must maintain corporate overhead, whereas an operating acquirer strips that apparatus out on day one.

“Usually against private equity, I can always win,” Stone explained. “I don't need their CFO. I don't need their legal department. I don't need all this overhead.”

When SS&C targeted a company listed on the Toronto Stock Exchange, Stone did not view the target through the lens of its nominal 15x EBITDA price tag. SS&C agreed to pay $165 million for $11 million in trailing cash flow. To a private equity sponsor, that entry valuation would require aggressive financial engineering or rapid organic growth to generate an acceptable return. To Stone, the target was carrying public company expenses that SS&C could eliminate immediately.

“You know, they were traded on the Toronto Stock Exchange,” Stone said. “We're not going to trade on the Toronto Stock Exchange. So you save all those exchange fees and I don't need to have another board. I don't need another public accountant. I don't need all all that stuff.”

By dropping the listing, dismissing the board, terminating redundant external auditor engagements, and cutting duplicate executive salaries, Stone expanded cash flow in months. “So we paid 165 for 11 million in EBITDA which is 15 times EBITDA, but within a year it was just a little over three times.”

Using Takeover Codes to Crush Competing Bids

Sponsor-backed buyers often rely on deal protection mechanisms and exclusivity windows to defend agreed transactions. Stone used takeover rules in Canada and the United Kingdom to disrupt them. In contested fights for targets like Financial Models Company, GlobeOp, and Blue Prism, Stone entered after initial terms were set and forced the sellers into open competition.

Canadian regulations permit a formal superior proposal to override existing agreements, typically requiring an interloper to top an existing offer by roughly 20%. Stone used that rule to break up transactions that private equity firms attempted to close quietly. “Canadian takeover rules, a superior bid is I think 20%,” Stone said. “Those keep companies honest because they know that interlopers like me are going to say, 'No, no, no, no, no. You're not getting that for that price.'”

Stone paired regulatory mechanics with aggressive bidding discipline. During one contested fight, a competitor named Hans challenged Stone's background, contrasting his own Wall Street trading pedigree with Stone's background as an accountant at Peat Marwick. Stone remembered the exchange clearly:

“Hans, an FX trader out of Salomon Brothers, and me, a CPA out of Peat Marwick, they want you to do their accounting, not me. I said I bet you Hans if I bid more than you I bet I win. And if you bid more than me, I bet you win. And by the way, Hans, if I bid more than you, I will be relentless to close this.”

Financial buyers underwrite downside protection through conservative debt structures and syndication terms. Scaled operating buyers underwrite operational eliminations they can guarantee themselves. When an acquirer can remove millions in corporate overhead on day one, they can comfortably outbid any sponsor and still achieve an attractive entry multiple.

Why It Matters

Public software consolidators and scaled strategic buyers retain an asymmetric pricing edge over buyout firms on public-to-private deals. As private equity sponsors face tighter debt terms and compressed return hurdles, strategic acquirers can absorb administrative costs directly into existing infrastructure, turning foreign takeover codes into an effective tool to break sponsor exclusivity.