Morgan Stanley has agreed to purchase Solium Capital, a Calgary-based employee stock plans manager, in a deal worth around C$1.1bn ($900m).
Solium is a software-as-a-service provider for equity administration, financial reporting and compliance.
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The business has 3,000 stock plan clients with one million employees. Its clients include startups such as Instacart, Shopify and Stripe.
On the other hand, Morgan Stanley’s existing business has 320 stock plan clients covering 1.5 million participants. A quarter of the bank’s clients are Fortune 500 companies.
The integration of the two firms is said to create a “leading provider” of stock plan administration and workplace wealth solutions.
Morgan Stanley co-head of wealth management Andy Saperstein said: “By combining stock plan administration, 401(k), other forms of deferred compensation, employee Financial Wellness education and our core Goals-Based Planning technology, we plan to create an integrated ‘Morgan Stanley Wealth Portal,’ which will offer employers the opportunity to deliver tailored financial counselling and industry leading advice to their employees.”
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By GlobalDataAs per the agreed terms of the transaction, the bank will pay C$19.15 in cash for each Solium share.
The deal is pending shareholder and regulatory approvals. It is expected to be wrapped up in the second quarter of this year.
Morgan Stanley expects the deal to have a “minimal impact” on its earnings and capital ratios.
Solium CEO Lopez will continue to serve the business, operating out of Calgary.
Morgan Stanley chairman and CEO James Gorman said: “The acquisition provides Morgan Stanley with broader access to corporate clients and a direct channel to their employees, as well as a greater opportunity to establish and develop relationships with a younger demographic and service this population early in their wealth accumulation years.”
The latest deal builds on the existing relationship between the two parties, which started in 2016.
The 2016 agreement made Solium responsible for administration of equity-compensation plans for the bank’s corporate clients and their employees.
