One month after announcing it will sell its U.S. Trust unit for $3.3 billion in cash, Charles Schwab Corp. announced an acquisition, albeit a much smaller transaction. Schwab said it will pay Nationwide Financial Services $115 million for the 401(k) Company, an Austin, Texas-based company that provides defined contribution plan administration to 100 companies with 400,000 plan participants around the country; the company's client
assets, Schwab said, total $21.7 billion.
The company will become part of Schwab's Investor Services Entreprise, which includes the Corporate and Retirement Services divison. In the statement announcing the deal, Schwab noted that the acquisition will allow it to meet the needs of retirement plans of all sizes: "While Schwab has enjoyed strong growth in the small, mid and large retirement plan segments, The 401(k) Company has been very successful winning against traditional providers in the mega plan segment."