Envestnet and BlackRock, through its Digital Wealth business, are entering into a strategic relationship to enhance the investment technology solutions they provide to financial advisers and the clients they serve.
Envestnet, a leading provider of intelligent systems for wealth management, has one of the most comprehensive, open architecture platforms for financial advisers in the wealth management industry. BlackRock Digital Wealth provides advisers with sophisticated technologies to help them build better portfolios, with customization and at scale. The two companies will accelerate work to integrate BlackRock Digital Wealth’s technologies into Envestnet’s platform.
As the wealth management industry continues to transform, both Envestnet and BlackRock are driving the evolution of technology solutions. The future of advice will be both more digital and more comprehensive. This relationship strengthens the framework for this future.
“As wealth managers shift to fee-based advisory relationships, they are asking for new technologies to help them scale their business and build better portfolios,” said Venu Krishnamurthy, global head of digital wealth for BlackRock. “Through this strategic relationship, we aim to bring BlackRock Digital Wealth’s solutions to Envestnet’s clients in a modern, highly integrated way.”
In conjunction with the strategic relationship, BlackRock will acquire an equity stake in Envestnet of approximately 4.9 percent by purchasing from Envestnet approximately 2.36 million shares of Envestnet common stock for a purchase price of $52.13 per share and an aggregate purchase price of approximately $122.8 million.
In addition, Envestnet will issue to BlackRock a warrant to purchase approximately 470,000 shares of Envestnet common stock at an exercise price of $65.16 per share, subject to customary anti-dilution adjustments. The warrant is exercisable at the option of BlackRock for four years from the date of issue. The company expects the closing of the investment to occur prior to the end of 2018, subject to customary closing conditions, including, among others, obtaining clearance under the Hart-Scott Rodino Antitrust Improvements Act.
