Chicago-based Envestnet picked up Prudential’s wealth management solutions division in a $30 million transaction on Friday.
In exchange for substantially all of the Prudential unit’s assets, Envestnet agreed to pay $10 million in cash upon closing and up to $23 million over the next three years, the company said. Barring any, the deal is expected to close in the third quarter.
“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,” says Envestnet’s chairman and CEO Jud Bergman.
With the Prudential unit’s $22 billion in institutional client assets, the deal is set to make Envestnet the biggest independent wealth management platform. According to MMI, Envestnet has $392 billion in total assets as of December 31, 2012.
“The combination of WMS and Envestnet will provide clients of WMS with an even stronger technology and wealth management platform,” says Prudential Investments president Stuart Parker. “We believe that clients will also benefit from the combined firm’s strong commitment to the bank and wealth management marketplace.”
Since its $85 million initial public offering three years ago, Envestnet has been on an acquisition roll. Last February it purchased Seattle-based software company Tamarac. With that $54 million deal, Envestnet gained Tamarac’s software capabilities including its portfolio management, rebalancing and performance reporting systems for RIAs.
Prior to that, Envestnet acquired Prima Capital Holding—which offered due diligence and other services to wealth management firms—as well as turnkey asset management program services provider FundQuest.