Retirement services provider Empower Retirement has agreed to buy wealth manager Personal Capital in a transaction worth up to $1bn.
The takeover combines Empower’s retirement plan services and integrated financial tools with Personal Capital’s digitally oriented personal wealth management platform.
The integration is said to offer retirement plan participants and individual investors a complete picture of their finances including personal assets and liabilities.
Empower will pay $825m upon deal completion that is anticipated in the second half of this year.
It will also pay up to $175m for planned growth.
Upon closing, Personal Capital will adopt the brand “Personal Capital, an Empower Company”. The deal is pending regulatory nod.
Empower is a much bigger player compared to Personal Capital.
Formed in 2014, Empower administers $656bn in assets for over 9.7 million retirement plan participants.
On the other hand, Personal Capital, established in 2009, oversees more than $12bn in assets.
Empower president and CEO Edmund Murphy III said: “The acquisition of Personal Capital and the integration of their tools and capabilities into the Empower offering is designed to create a best-of-breed platform — powered by digital and human advice — to help individuals achieve their financial goals.
“In addition, the retirement plan sponsors and advisers we serve will be able to offer their plan participants a more powerful retirement benefit that is highly valuable in a competitive labour market.”
Personal Capital CEO Jay Shah will assume the role of president of Personal Capital and report to Murphy III. He will also be a part of the executive team.
Shah calls Empower a “philosophically aligned partner”.