BNY Mellon has entered into a definitive agreement to acquire PNC’s global investment servicing business, a provider of custody, fund accounting, transfer agency and outsourcing solutions for asset managers and financial advisers.
The purchase price of USD2.31bn includes the purchase of USD1.57bn of stock and repayment of inter-company debt from PNC.
BNY Mellon plans to raise approximately USD800m 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," says 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."
BNY Mellon says it will become the number two provider in fund accounting, administration and transfer agency. The acquisition will add USD855bn in assets under administration, including USD460bn in assets under custody, and double the number of funds serviced for accounting and administration.
PNC’s global investment servicing business is based in Wilmington, Delaware, with locations across the US and Europe. It has approximately 4,500 employees. Stephen M. Wynne, current chief executive, will remain in that role, reporting to Tim Keaney and Jim Palermo, co-heads of BNY Mellon Asset Servicing.