Acquisition Makes Envestnet the Largest Independent Wealth
Management Platform
Envestnet,
Inc. (NYSE: ENV), a leading provider of unified wealth management
technology and services to investment advisors, announced today that it
has entered into a definitive agreement to acquire substantially all of
the assets of the Wealth Management Solutions (“WMS”) division of
Prudential Investments. Advisors and their clients will benefit from
Envestnet’s scalable wealth management platform, institutional-quality
manager research and broad product access, as well as the practice
management expertise of Prudential WMS.
“The Prudential WMS team has demonstrated a keen understanding of the
evolving challenges faced by their customers and has cultivated a
long-term track record of providing value-added solutions. We look
forward to integrating WMS’s expertise into our technology platform to
provide best-in-class, scalable solutions to banks and bank trust
departments of all sizes,” said Jud Bergman, Chairman and Chief
Executive Officer, Envestnet. “This consolidating acquisition solidifies
our presence in the bank channel, and is an important milestone on our
path of transforming the wealth management industry and offering
advisors and institutions the solutions they need to improve portfolio
and practice management. By leveraging our core expertise in large-scale
enterprise conversions in the context of a consolidating acquisition, we
expect to accelerate our growth and create shareholder value.”
Prudential WMS has more than 30 years of experience helping financial
services firms develop and enhance their wealth management offerings.
Seasoned industry experts consult with client firms to help envision,
design and implement wealth management offerings to optimize workflows
and improve growth and profitability.
As of December 31, 2012, Prudential WMS administered approximately $22
billion on behalf of institutional clients. After including assets from
WMS, Envestnet will sit atop several wealth management industry
rankings, most notably:
-
#1 turnkey asset management platform (“TAMP”) – $139 billion in TAMP
assets as of December 31, 2012, according to Cerulli;
-
#1 in sponsored and non-sponsored assets by third party vendors and
TAMPs, as of December 31, 2012, according to MMI; and
-
#1 in top service providers by total assets – $392 billion in assets
as of December 31, 2012, according to MMI.
Envestnet has agreed to acquire substantially all of the assets of
Prudential WMS for $10 million in cash upon closing, plus contingent
consideration of up to a total of $23 million in cash to be paid over
three years. The transaction is also subject to customary closing
conditions, including customer consents, and is expected to close by
early third quarter 2013. Given the extended planning cycles within the
bank channel, the full economic effects of the consolidation may take a
year or longer from closing.
“The combination of WMS and Envestnet will provide clients of WMS with
an even stronger technology and wealth management platform,” said Stuart
Parker, president of Prudential Investments. “We believe that clients
will also benefit from the combined firm’s strong commitment to the bank
and wealth management marketplace.”
Silver Lane Advisors LLC served as financial advisor to Prudential
Financial, Inc. and WMS management. Envestnet did not retain a financial
advisor. Mayer Brown LLP acted as legal counsel to Envestnet and Wilmer
Cutler Pickering Hale and Dorr LLP acted as counsel to Prudential
Financial, Inc.
“This combination enhances a deep, consultative approach to ensuring our
clients’ business success,” said Bill Crager, President, Envestnet. “We
are excited about welcoming the WMS team into our company and look
forward to partnering with their clients to help them grow and compete
in this changing financial services landscape.”
About Envestnet
Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth
management technology and services to investment advisors. Our
open-architecture platforms unify and fortify the wealth management
process, delivering unparalleled flexibility, accuracy, performance and
value. Envestnet solutions enable the transformation of wealth
management into a transparent, objective, independent and fully-aligned
standard of care, and empower advisors to deliver better results.
Envestnet's Advisor Suite® software empowers financial advisors to
better manage client outcomes and strengthen their practice. Envestnet
provides institutional-quality research and advanced portfolio solutions
through our Portfolio Management Consultants group, Envestnet | PMC®.
Envestnet | Tamarac provides leading rebalancing, reporting and practice
management software. For more information on Envestnet, please visit www.envestnet.com.
Cautionary Statement Regarding Forward-Looking Statements
The forward-looking statements made in this press release concerning,
among other things, Envestnet, Inc.’s (the “Company”) expected financial
performance and outlook, its strategic operational plans and growth
strategy are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements involve risks
and uncertainties and the Company’s actual results could differ
materially from the results expressed or implied by such forward-looking
statements. Furthermore, reported results should not be considered as an
indication of future performance. The potential risks, uncertainties and
other factors that could cause actual results to differ from those
expressed by the forward-looking statements in this press release. For
example, the Company’s forward-looking statements related to WMS and the
anticipated acquisition could prove incorrect if the transaction were to
not close, if WMS were to perform differently than currently expected by
the Company or if anticipated benefits of the transaction are not
realized. More generally, potential risks, uncertainties and other
factors relating to the Company’s business include, but are not limited
to, difficulty in sustaining rapid revenue growth, which may place
significant demands on the Company’s administrative, operational and
financial resources, fluctuations in the Company’s revenue, the
concentration of nearly all of the Company’s revenues from the delivery
of investment solutions and services to clients in the financial
advisory industry, the Company’s reliance on a limited number of clients
for a material portion of its revenue, the renegotiation of fee
percentages or termination of the Company’s services by its clients, the
impact of market and economic conditions on the Company’s revenues,
compliance failures, regulatory actions against the Company, the failure
to protect the Company’s intellectual property rights, the Company’s
inability to successfully execute the conversion of its clients’ assets
from their technology platform to the Company’s technology platform in a
timely and accurate manner, general economic, political and regulatory
conditions, as well as management’s response to these factors. More
information regarding these and other risks, uncertainties and factors
is contained in the Company’s filings with the Securities and Exchange
Commission (“SEC”) which are available on the SEC’s website at www.sec.gov
or the Company’s Investor Relations website at http://ir.envestnet.com/.
You are cautioned not to unduly rely on these forward-looking
statements, which speak only as of the date of this press release. All
information in this press release is as of April 12, 2013 and, unless
required by law, the Company undertakes no obligation to publicly revise
any forward-looking statement to reflect circumstances or events after
the date of this press release or to report the occurrence of
unanticipated events.
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