Morgan Stanley agrees to buy Solium Capital at 43% premium

Morgan Stanley agrees to buy Solium Capital at 43% premium
Purchase will allow Morgan advisers to court tech workers as they start to accumulate wealth
FEB 11, 2019
By  Bloomberg
Morgan Stanley agreed to buy Solium Capital Inc. in a bid to add younger clients and tech startups to its stock-plan administration business. The firm will pay $19.15 (Canadian dollars) a share in cash, according to a statement Monday, or about 43% higher than Solium's closing price on Friday. The agreement values Solium at about $900 million. (More:Morgan Stanley wants its advisers to be top of mind for Alexa) Morgan Stanley will add Calgary-based Solium's 3,000 stock-plan clients and 1 million participants to its rival offering, which has 320 clients and 1.5 million participants. Solium's clients include such startups as Stripe Inc., Instacart Inc. and Shopify Inc., giving Morgan Stanley's investment bankers a chance to pitch those firms capital-raising ideas, while its advisers court tech workers as they start to accumulate wealth. The large premium Morgan Stanley agreed to pay "might raise a brow, but we think this makes significant strategic sense," analysts at Evercore ISI said in a note, adding that the link-up "provides a real path towards the organic growth and next generation of clients that many investors have been questioning." Shares of Morgan Stanley rose 0.9% to $41.17 in early trading at 9:07 a.m. The Wall Street bank entered into a partnership with Solium in 2016 to administer equity-compensation plans for its corporate clients and their employees. The deal announced Monday won't affect Morgan Stanley's buyback plans, and is expected to be completed in the second quarter, according to the statement. (More:Morgan Stanley wealth management revenue falls 6% in fourth quarter) "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," Chief Executive Officer James Gorman said in the statement.

Latest News

Summit Financial, MassMutual boost advisor appeal with growth-focused tech
Summit Financial, MassMutual boost advisor appeal with growth-focused tech

Summit Financial unveiled a suite of eight new tools, including AI lead gen and digital marketing software, while MassMutual forges a new partnership with Orion.

SEC enforcement actions drop sharply, with focus shifting to investor fraud
SEC enforcement actions drop sharply, with focus shifting to investor fraud

A new analysis shows the number of actions plummeting over a six-month period, potentially due to changing priorities and staffing reductions at the agency.

MAI inks mega-deal with Evoke Advisors to form $60B AUM firm
MAI inks mega-deal with Evoke Advisors to form $60B AUM firm

The strategic merger of equals with the $27 billion RIA firm in Los Angeles marks what could be the largest unification of the summer 2025 M&A season.

Employees tapping retirement funds amid financial strain, led by Gen Zs
Employees tapping retirement funds amid financial strain, led by Gen Zs

Report highlights lack of options for those faced with emergency expenses.

LPL Financial on target to retain 90% of Commonwealth financial advisors, Wolfe Research analyst says
LPL Financial on target to retain 90% of Commonwealth financial advisors, Wolfe Research analyst says

However, Raymond James has had success recruiting Commonwealth advisors.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.