TD AMERITRADE Holding Corporation has agreed to acquire Fiserv Trust Company and the accounts of Fiserv’s institutional retirement plan and advisor services operations for $225 million in cash at closing, plus contingent cash consideration of up to $100 million based on the achievement of revenue targets over the twelve months subsequent to closing.
Additionally, Fiserv will be reimbursed by TD AMERITRADE for the net capital included in the business of approximately $50 million at closing, and Fiserv will retain its additional excess capital of approximately $30 million, according to a press release. As part of the transaction, Fiserv’s registered investment advisor and retirement plan administrator clients will transition post-closing to TD AMERITRADE.
Fiserv will also enter into a transition services agreement with TD AMERITRADE, under which Fiserv will provide services for a period of up to six months after the closing, in order to facilitate an orderly transition of the business.
Fiserv ISS manages nearly 300,000 retirement and custodial accounts valued at $46 billion.
In a separate transaction, Bob Beriault, who is currently group president for Fiserv ISS, has agreed to acquire the remaining accounts and net capital of the investment support services business for approximately $50 million in cash. Fiserv will retain a preferred share minority interest in the business. The new private company will provide back-office and custody services for 190,000 retirement accounts with an estimated $16 billion in assets and $1 billion in FDIC insured deposits. This transaction is expected to close after regulatory approval and the completion of the transition to TD AMERITRADE.
The transactions, which are subject to customary conditions and regulatory approvals, are expected to close by the end of the year, or earlier, depending on regulatory approvals.
“We looked hard to find the right partner for our institutional clients, and TD AMERITRADE offered a great fit,” said Skip Schweiss, executive vice president, Fiserv Investment Support Services. “They share our commitment to exceptional service, and we are impressed with their support for the fee-compensated advisory industry and their emerging strength in the open architecture defined contribution market space.”
“We are excited about the opportunity to serve the Fiserv client base,” said Tom Bradley, president, TD AMERITRADE Institutional. “We’re confident that these clients will benefit significantly from our industry-leading technology, flexible service teams, extensive management experience and ongoing advisor advocacy efforts.”