BNY Mellon to acquire PNC's global investment servicing business
03 February 2010 | 1937 views | 0
Source: BNY Mellon
BNY Mellon (NYSE: BK), the global leader in asset management and securities servicing, today announced a definitive agreement to acquire PNC's Global Investment Servicing Inc. (GIS) business, a leading provider of custody, fund accounting, transfer agency and outsourcing solutions for asset managers and financial advisors. The acquisition will enhance BNY Mellon's leadership position supporting fund managers and financial advisors globally across several business lines while providing the potential for significant revenue and expense synergies.
The purchase price of $2.31 billion includes the purchase of $1.57 billion of stock and repayment of intercompany debt from PNC. BNY Mellon plans to raise between $700-$800 million in equity as part of the transaction. The all-cash acquisition, which will be accretive in the first year, is expected to close in the third quarter of 2010, subject to necessary regulatory approvals.
"This acquisition significantly strengthens our service offering and market share with asset managers and financial advisors, while delivering attractive returns to our shareholders," said Robert P. Kelly, BNY Mellon chairman and chief executive officer. "We expect the transaction to accelerate our growth, deliver economies of scale and strengthen our leadership position for Asset Servicing and Pershing."
The addition of GIS's broad capabilities deepens BNY Mellon's product set, adds scale to its growth businesses and expands service to key client segments. The company will also raise its profile and increase market position in several areas as a result of this acquisition by:
• Becoming the #2 provider in fund accounting, administration and transfer agency;
• Adding $855 billion in assets under administration, including $460 billion in assets under custody, and doubling the number of funds serviced for accounting and administration;
• Improving to #3 globally in alternative fund assets under administration and doubling its European asset base; and
• Increasing managed account assets by $80 billion.
Based in Wilmington, Del. with locations across the United States and Europe, GIS has approximately 4,500 employees. Stephen M. Wynne, current CEO of GIS, will remain in that role, reporting to Tim Keaney and Jim Palermo, co-heads of BNY Mellon Asset Servicing.
"GIS's management team and staff have built a truly impressive franchise with lasting client relationships. Our focus will be on providing outstanding service to GIS's clients and welcoming our new colleaw colleagues into Beaw colleagues into BNY Mellon as we work together to deliver on the great potential this combination of businesses offers," said Gerald L. Hassell, BNY Mellon president.