Actua to Acquire FolioDynamix, A Cloud-Based Wealth Management Technology Platform For $199M In Cash
Actua Corporation, formerly ICG Group (Nasdaq: ACTA), today announced that it has reached agreement to acquire FolioDynamix, a leading, secure, cloud-based investment and wealth management platform. In the transaction, Actua would acquire an approximately 97% primary equity interest in FolioDynamix for an estimated $199 million in cash, subject to transaction expenses and "true-up" adjustments for working capital, cash, debt and other items. The consummation of the acquisition, which is subject to a number of customary closing conditions, is expected to occur in the fourth quarter of 2014.
Based in New York, FolioDynamix offers wealth service providers and investment advisors a comprehensive, secure, cloud-based wealth management technology platform and advisory solutions for managing the full wealth management lifecycle across all account types, including unified managed account (UMA) and unified managed household (UMH) programs. The company delivers comprehensive solutions to financial advisors, professionals and institutions.
Subject to final accounting (including purchase accounting) adjustments, FolioDynamix brings to Actua a current net revenue run rate of over $30 million (approximately $50 million on a gross revenue basis), with positive earnings and cash flow. The company grew over 40% in 2013, and growth is expected to continue at that rate in 2014.
"We have followed FolioDynamix since 2010 and have watched Joe Mrak and his team execute and create the first truly integrated, cloud-based enterprise level wealth management platform. They have built an impressive customer base that relies on FolioDynamix to deliver industry-leading capabilities to their clients," said Doug Alexander, President of Actua. "We are thrilled to add FolioDynamix to Actua's group of high growth, high margin, cloud-based brands, and to expand our presence in the financial services sector. FolioDynamix exemplifies the Actua vision of leveraging the power of the cloud to transform vertical markets and processes."
"The continued flow of assets into managed accounts and model portfolios, the need for wealth management firms to innovate and modernize both programs and technology, combined with the trend toward adopting new platform solutions, provide a significant opportunity for FolioDynamix to grow its position as an industry leader," said Joseph Mrak, CEO of FolioDynamix. "With strong momentum and a vast market opportunity still ahead of us, we are excited to become an Actua company. Actua provides extensive expertise in building successful cloud-based platforms and we are closely aligned with a shared vision for continued growth. Together, we will continue to serve our blue chip client base, delivering unique and innovative solutions to drive further growth and market penetration."
"We are excited to augment Actua with the addition of the highly talented team at FolioDynamix," said Walter Buckley, CEO of Actua. "Attracting and incentivizing the management teams of the businesses we own is mission critical. We look forward to working closely with Joe and his team to optimize our collective expertise and continue building the long term value of our brands."
Actua will update its 2014 guidance upon the close of this transaction.
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