Envestnet, the leading third-party provider of separate accounts to independent brokr-dealers, announced on Monday it plans to acquire advisor-facing fintech firm FolioDynamix in a $195 million cash transaction.
With the acquisition, FolioDynamix's trading tools, planning software and research services will be added to Chicago-based Envestnet’s technology suite, as well as its brokerage and commission support.
“Acquiring FolioDynamix advances our growth strategy and creates value for our shareholders,” said Jud Bergman, chairman and CEO of Envestnet, in released comments. “This acquisition, our sixth significant transaction since 2010, expands our industry footprint, allowing us to further leverage our operating scale and data analytics capabilities as we continue to build the financial wellness network and help our clients deliver better outcomes.”
The deal is expected to close in the first quarter of 2018. Envestnet will fund the transaction with cash on its balance sheet and borrowings under its revolving credit facility.
As a result of the transaction, Envestnet expects to immediately add to its EBITDA and net income per share, having already identified nearly $20 million in cost synergies. The company also expects to acquire tax benefits valued at approximately $10 million.
As of June 30, 2017, FolioDynamix supported more than 3.2 million investor accounts with over $800 billion in assets.