Charles Schwab (SCHW) announced today an agreement to acquire ThomasPartners, Inc. The deal includes an $85 million upfront payment in the form of cash, and the opportunity for additional payments contingent upon future growth in assets under management. This deal is expected to close in the fourth quarter.
ThomasPartners is a dividend income-focused asset management firm with $2.3 billion in assets under management as of the end of September 2012. ThomasPartners has mostly growth-oriented investment portfolios designed to generate dividend income streams. ThomasPartners has consistently outperformed relevant benchmarks over the nine-year history of its dividend product.
ThomasPartners CEO Gregory Thomas, as well as his investment team led by chief investment officer William McMahon, will remain with the firm to oversee investments and portfolio management. ThomasPartners’ portfolios will be offered to Schwab retail clients. ThomasPartners’ money management solutions will be made available at a lower cost to clients of independent Registered Investment Advisors through the Schwab Advisors Services platform. At closing Schwab will waive all transaction costs for ThomasPartners’ managed accounts custodied on Schwab’s Advisor Services platform.
ThomasPartners CEO Gregory Thomas said, “We have worked together with Schwab since 2001, with more than half our assets currently custodied on Schwab’s Advisor Services platform, and we are excited to be joining such a great company.” Schwab president Walt Bettinger said, “ThomasPartners’ dividend strategy complements Schwab’s existing asset management line-up and helps provide our clients with a more complete range of money management solutions to serve them along their investing journey.”
Schwab expects this acquisition to be neutral for EPS the first 12 months after closing. The acquisition is anticipated to begin being modestly accretive to earnings within the second 12 months.
For the full press release click here.