Published: Wed, February 13, 2019
Economy | By

Morgan Stanley buys Solium Capital for $US900m in quest for millennial clients

Morgan Stanley buys Solium Capital for $US900m in quest for millennial clients

Morgan Stanley has struck a $900 million cash deal to buy Solium Capital, a Canadian provider of cloud-enabled share plan administration services.

The deal follows last week's $66 billion merger between regional banks BB&T and SunTrust, the largest bank merger since the 2008 financial crisis.

Calgary-based Solium provides stock plans for over 3,000 companies, which include Instacart, Levi Strauss, Shopify, Bombardier and Dropbox.

Meanwhile, Morgan Stanley has 320 clients with 1.5m participants. Solium also boasts a strong business-to-business salesforce and is a top provider in private company equity administration, all of which is expected to bolster Morgan Stanley's existing offering, the companies say.

Morgan Stanley isn't ruling out acquiring traditional wealth-management firms as well as more financial-technology companies, people familiar with the matter said.

Shares of Morgan Stanley fell 0.7 per cent to $US40.53 in NY trading, while Solium surged 43 per cent to $US19.09. The transaction is expected to close in the second quarter of 2019, subject to court, Solium shareholder and regulatory approvals, and other customary closing conditions.

Under the agreement, Morgan Stanley will pay $19.15 per share for Solium, which helps companies manage employee stock plans.

"We view this acquisition as part of our broader, longer-term strategy, leveraging our digital capabilities in the workplace", said Andy Saperstein, co-head of wealth management at Morgan Stanley.

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