Empower Retirement has agreed to acquire Personal Capital for up to $1 billion in enterprise value. The transaction is expected to close in the second half of 2020. Rockefeller Capital Management served as financial advisor to Empower while Moelis & Company LLC did likewise for Personal Capital. Personal Capital is an investment advisor and wealth manager.
GREENWOOD VILLAGE, Colo. & REDWOOD SHORES, Calif.–(BUSINESS WIRE)–Empower Retirement (“Empower”), the nation’s second-largest retirement services provider,1 and Personal Capital, a digital-first registered investment adviser and wealth manager with award-winning financial tools, today announced that they have entered into a definitive agreement for Empower to acquire Personal Capital.
Under the agreement, Empower will acquire Personal Capital for up to $1 billion in enterprise value, composed of $825 million on closing and up to $175 million for planned growth.
The combination will bring together Empower’s leading retirement plan services and integrated financial tools and Personal Capital’s rapidly growing, digitally oriented personal wealth management platform. Retirement plan participants and individual investors will have all the tools and advice they need to see a complete, 360-degree financial picture — that includes their personal assets and liabilities — and the ability to manage their progress toward their financial goals.
“Empower and Personal Capital are joining forces to take the next step forward in the evolution of an integrated platform to deliver personalized advice, financial wellness and comprehensive financial planning to millions of individual investors and retirement plan participants,” said Edmund F. Murphy III, President and Chief Executive Officer of Empower. “The acquisition of Personal Capital and the integration of their tools and capabilities into the Empower offering is designed to create a best-of-breed platform — powered by digital and human advice — to help individuals achieve their financial goals.
“In addition, the retirement plan sponsors and advisors we serve will be able to offer their plan participants a more powerful retirement benefit that is highly valuable in a competitive labor market.”
Personal Capital’s President and Chief Executive Officer Jay Shah added, “In Empower, we have found a purpose-oriented partner that shares our values and drive to deliver better client outcomes and customer-focused innovation. When we founded Personal Capital over a decade ago, we set out to redefine the financial services landscape by always putting our customers first. By pairing consumer technology and human advice, we provide data-driven personalized financial solutions and help our clients find financial confidence at scale. With Empower, we are joining forces with a philosophically aligned partner to accelerate our original vision and mission.”
Compelling Strategic Benefits of the Business Combination
· Enhanced capabilities for individuals: The combination of Empower and Personal Capital will create a stronger enterprise with the scale, capability and technology to better serve individuals’ savings, financial planning and retirement needs. The addition of Personal Capital’s leading-edge digital platform to Empower’s retirement services business will provide a complete financial wellness experience for retirement plan participants and individuals investing on their own.
· Expanded business-to-business retirement plan offering: Empower and Personal Capital will have the capability to offer retirement plan sponsors’ employees a singular view of their entire financial picture. This enhanced visibility will in turn create new opportunities for plan sponsors to offer improved financial wellness benefits that are highly tuned to the needs of individual employees. The combined company’s more robust offerings, through its state-of-the-art financial wellness support platform, will help Empower clients differentiate their benefit offering in a highly competitive labor market.
· Strong growth opportunities: Leveraging Empower’s scale and infrastructure, Personal Capital will be uniquely positioned to serve the growing segment of consumers who seek a combination of digital and human advice while helping to accelerate the capture of rollovers and other out-of-plan assets.
Empower, formed in 2014, administers $656 billion in assets on behalf of 9.7 million American workers through approximately 40,000 workplace savings plans. Empower serves all segments of the defined contribution plan market and provides services to plans of all sizes, including private-label recordkeeping clients. Empower serves 135,000 IRA and brokerage account customers with approximately $13 billion in assets.
Empower has annually grown at more than twice the rate of the industry average2 fueled by integrated financial technology tools that have been the hallmark of Empower’s highly successful retirement plan solutions.
Since its founding in 2009, Personal Capital has added over 2.5 million users on its platform, tracking over $771 billion of household assets. Personal Capital is recognized for creating a digital-first, virtually delivered wealth management platform and is among the fastest growing in its market.
After the close of the transaction, Personal Capital will be branded as “Personal Capital, an Empower Company” and will continue to provide its award-winning financial tools and investment solutions to its clients.
Personal Capital CEO Jay Shah will serve as President of Personal Capital, reporting to Empower CEO Edmund F. Murphy III, and will be a member of its executive team. A joint team from both enterprises will work together to integrate the Personal Capital and Empower offerings.
The transaction is expected to close in the second half of 2020 subject to required regulatory approvals and other customary closing conditions.
Sullivan & Cromwell LLP served as legal counsel and Morgan Stanley & Co. LLC and Rockefeller Capital Management served as financial advisors to Empower. Willkie Farr & Gallagher LLP served as legal counsel and Moelis & Company LLC served as financial advisor to Personal Capital.
About Empower Retirement
Headquartered in metro Denver, Empower Retirement administers $656 billion in assets for more than 9.7 million retirement plan participants as of May 31, 2020.3 It is the nation’s second-largest retirement plan recordkeeper by total participants.1 Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, midsize and large corporate 401 (k) clients; non-profit 403 (b) entities; private-label recordkeeping clients; and IRA customers. For more information please visit empower-retirement.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.
About Personal Capital
Personal Capital is a remote-delivery, industry-leading digital wealth management company that helps people transform their financial lives through technology and advisory services. The company’s state-of-the-art tools and technology provide investors with a complete financial picture, utilized by over 2.5 million customers. Its registered investment advisors provide expert guidance, and customized strategies, based on a personal understanding of an investor’s financial picture and goals. Personal Capital currently manages over $12 billion in assets, virtually delivered from offices across the U.S. For more information, please visit www.personalcapital.com or connect with us on Facebook, Twitter or LinkedIn.
Advisory services are offered for a fee by Personal Capital Advisors Corporation, a wholly owned subsidiary of Personal Capital Corporation. Personal Capital Advisors Corporation is a registered investment advisor with the Securities and Exchange Commission (“SEC”). SEC registration does not imply a certain level of skill or training. Investing involves risk. Past performance is not a guarantee or indicative of future returns. The value of your investment will fluctuate, and you may gain or lose money.