In an effort to further strengthen its Canadian wealth management business, Broadridge Financial Solutions entered into a purchase agreement to acquire RPM Technologies, a provider of enterprise wealth management software solutions and services, for about $300 million, Broadridge announced this week.
The transaction is expected to close in early June, Donna Bristow, managing director of North American Wealth at Broadridge, told ThinkAdvisor on Wednesday.
“Wealth represents a significant portion” of revenue in Canada for Broadridge and is “a growing segment” for it in the U.S., she said.
The acquisition will provide “important new capabilities and next-generation technology” to each company’s clients, according to Broadridge’s announcement. Broadridge expects its latest acquisition to contribute $40 million to $50 million in revenue for fiscal 2020, but said adjusted earnings per share won’t be materially affected.
“Broadridge and RPM have a footprint that is very complementary,” Bristow said, adding: “This acquisition will accelerate Broadridge’s retail wealth strategy in the Canadian market, expanding Broadridge’s footprint to include bank branch-based retail wealth” there. The purchase will also: expand its product suite and “growth runway”; “deepen” its relationships with “key” clients; and complement its “core brokerage position with expansion into retail wealth including mutual fund dealer distribution, term manufacturing and mutual fund transfer agency capabilities,” she said.
RPM, whose current owners include Bayshore Capital, has “proven capabilities” in the Mutual Fund Dealers Association of Canada marketplace and a “successful track record of winning and on-boarding new clients,” Broadridge said. RPM’s technology platforms now support more than 15 million customer accounts, according to the announcement.
“We are very pleased to add RPM’s state-of-the-art platforms and blue-chip client roster,” said Tom Carey, Broadridge’s president of Global Technology and Operations, in a statement. “This investment underscores our commitment to bring value-added technology solutions to the industry, and it supports our longer-term strategy of building a strong North American Wealth business.”
With the companies’ “combined technology and innovation capabilities, clients will gain deep product expansion opportunities, superior digital channel capabilities and seamless enterprise solutions,” according to Dave Poppleton, RPM’s CEO and president.
The purchase is subject to the completion of an intercompany reorganization by RPM and standard customary closing conditions.
Asked if the purchase will result in any job losses or management changes, Bristow said only: “Broadridge has full confidence in the RPM team given the tremendous accomplishments achieved to date and how we view both organizations aligning well culturally. Over time, we will leverage the strengths of both organizations for our go-to-market approach and client relationships.”
Other recent acquisitions by Broadridge included Rockall.