May 25, 2007

TD Ameritrade to Acquire Fiserv's Advisor Unit

Price is $225 million in cash, plus earn out

TD Ameritrade Holding Corp. has signed an agreement to acquire Fiserv Inc.'s Fiserv Investment Support Services (ISS) operation, which Fiserv says manages 300,000 retirement, trust, and custodial accounts valued at $46 billion. Under the complicated deal that will break up Fiserv ISS, TD Ameritrade will pay $225 million in cash for the operation at closing, which is expected to occur by the end of the year, along with an additional $100 million payment contingent on the business achieving certain revenue targets over the twelve months after closing.

Denver-based Fiserv ISS, the former DATALynx, custodies client assets for some 400 fee-based advisors through its Advisor Services unit, and has gained a reputation over the years for the quality of its support and service staff. TD Ameritrade was formed through the acquisition of TD Waterhouse USA by Ameritrade in 2005; it custodies assets for some 4,000 RIAs. When the deal closes, it should place Waterhouse back in a solid third place among custodians of RIAs as measured by assets, behind Schwab and Fidelity and ahead of a fast-growing Pershing Advisor Solutions.

Skip Schweiss, the long-time Fiserv executive who oversess Fiserv ISS, said in a statement that "We looked hard to find the right partner for our institutional clients, and TD Ameritrade offered a great fit," going on to say TD Ameritrade shared Fiserv's "commitment to exceptional service," and noted its "emerging strength in the open architecture defined contribution market space."

Reprints Discuss this story
This is where the comments go.