Strategy complements core Financial Advisor channel as source of new clients
NEW YORK/CALGARY – Morgan Stanley (NYSE: MS) has entered into a definitive agreement to acquire Solium Capital Inc. (TSX: SUM) (“Solium”), a leading global provider of software-as-a-service (SaaS) for equity administration, financial reporting and compliance. With this acquisition, Morgan Stanley is positioned to be an industry leader in Workplace Wealth Solutions, bringing together a major stock plan administration platform with a leading Wealth Management business.
Solium’s 3,000 stock plan clients, with one million participants, include Instacart, Levi Strauss, Shopify and Stripe and a range of fast growing private companies, as well as newly public companies. Morgan Stanley has 320 stock plan clients, with 1.5 million participants, of which a quarter are in the Fortune 500. This combination will create a leading provider of stock plan administration services and Workplace Wealth. Solium has a strong business-to-business salesforce, an industry-leading cloud-based service platform and is a leader in private company equity administration, which will complement and strengthen Morgan Stanley’s offering.
Morgan Stanley has been building a comprehensive suite of digital tools that will support expansion within the Workplace Wealth marketplace. Morgan Stanley entered into a partnership with Solium in 2016 to administer equity compensation plans for Morgan Stanley’s corporate clients and their employees.
“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,” said James Gorman, Chairman and CEO.
This is expected to enhance Morgan Stanley’s client acquisition efforts in a manner that complements the Financial Advisor channel, which constitutes the core of Morgan Stanley’s strategy. As plan participants build their wealth, and their needs become more complex, there is a natural transition to an Advisor-based relationship. Younger plan participants in the earlier stages of their careers can elect to be served by the Firm’s Morgan Stanley Access Investing and Morgan Stanley Virtual Advisor channels.
Marcos Lopez, CEO of Solium, will remain with the company and be based in Calgary.
“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. “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 counseling and industry leading advice to their employees.”
Morgan Stanley will acquire all of the issued and outstanding common shares of Solium for
CAD 19.15 per share in cash, representing a total equity value of approximately CAD 1.1 billion ($0.9 billion). The transaction is expected to have a minimal impact on the Firm’s earnings and capital ratios. Morgan Stanley does not anticipate any adjustments to the share repurchases in the first or second quarter of 2019 that were included as part of the Firm’s 2018 Capital Plan. 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.
Davis Polk & Wardwell LLP and Osler, Hoskin & Harcourt LLP are serving as legal advisors to Morgan Stanley in connection with the transaction.
About Solium
Solium provides cloud-enabled services for global equity administration, financial reporting and compliance. From offices in the United States, Canada, the United Kingdom, Europe and Australia, Solium’s innovative software-as-a-service (SaaS) technology powers share plan administration and equity transactions for more than 3,000 corporate clients with employee participants in more than 100 countries. For more information about Solium, please visit Solium.com.
About Morgan Stanley
Morgan Stanley is a leading global financial services firm providing investment banking, securities, investment management and wealth management services. With offices in more than 41 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.
This press release may contain forward-looking statements, including the attainment of certain financial and other targets, objectives and goals. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made, which reflect management’s current estimates, projections, expectations, assumptions, interpretations or beliefs and which are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of risks and uncertainties that may affect the future results of the Firm, please see “Forward-Looking Statements” immediately preceding Part I, Item 1, “Competition” and “Supervision and Regulation” in Part I, Item 1, “Risk Factors” in Part I, Item 1A, “Legal Proceedings” in Part I, Item 3, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2017 and other items throughout the Form 10-K, the Firm’s Quarterly Reports on Form 10-Q and the Firm’s Current Reports on Form 8-K, including any amendments thereto.
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