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Empower Retirement to acquire Personal Capital for $1bn

Empower Retirement, aimed to revolutionise workplace retirement savings has announced that the firm has entered into a definitive agreement to acquire Personal Capital, a digital-first registered investment adviser and wealth manager.

Under the agreement, Empower will acquire Personal Capital for $1 B in enterprise value, composed of $825 M on closing and up to $175 M for planned growth.

The combination expects to bring together Empower’s retirement plan services and integrated financial tools with Personal Capital’s digitally oriented personal wealth management platform. Retirement plan participants and individual investors can benefit from all the tools and advice they need to see a complete, 360-degree financial picture that includes their personal assets and liabilities and the ability to manage their progress toward their financial goals.

“Empower and Personal Capital are joining forces to take the next step forward in the evolution of an integrated platform to deliver personalised advice, financial wellness and comprehensive financial planning to millions of individual investors and retirement plan participants. 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 advisors we serve will be able to offer their plan participants a more powerful retirement benefit that is highly valuable in a competitive labor market,” said Edmund F. Murphy III, President and Chief Executive Officer of Empower.

Strategic benefits of the business combination include:

  • Enhanced capabilities for individuals: Together, the companies expect to create a more robust enterprise with the scale, capability and technology to better serve individual’s savings, financial planning and retirement needs.
  • Expanded business-to-business retirement plan offering: The companies will have the capability to offer retirement plan sponsors’ employees a singular view of their entire financial picture.
  • Strong growth opportunities: By leveraging Empower’s scale and infrastructure, Personal Capital will be positioned to serve the growing segment of consumers who seek a combination of digital and human advice while helping to accelerate the capture of roll-overs and other out-of-plan assets.

Recently Xalles signed a Share Purchase Agreement to acquire 1Rivet Global, the International division of 1Rivet.

“In Empower, we have found a purpose-oriented partner that shares our values and drive to deliver better client outcomes and customer-focused innovation. When we founded Personal Capital over a decade ago, we set out to redefine the financial services landscape by always putting our customers first. By pairing consumer technology and human advice, we provide data-driven personalized financial solutions and help our clients find financial confidence at scale. With Empower, we are joining forces with a philosophically aligned partner to accelerate our original vision and mission,” said Jay Shah, Personal Capital’s President and Chief Executive Officer.

Empower Retirement serves all segments of the defined contribution plan market and provides services to plans of all sizes, including private-label recordkeeping clients. According to company data, Empower administers $656 B in assets for more than 9.7 M retirement plan participants as of May 2020.

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