BlackRock has signed an agreement to acquire a 4.9% equity stake in wealth management software and services provider Envestnet for $122.8m. The collaboration will see the integration of BlackRock Digital Wealth into Envestnet’s platform.
Under the terms of the agreement, BlackRock will purchase 2.36 million shares of Envestnet common stock at $52.13 per share.
Additionally, Envestnet will issue a warrant to BlackRock to buy around 470,000 shares priced at $65.16 per share, subject to customary anti-dilution adjustments.
BlackRock can exercise the warrant within four years from the date of issue.
The transaction is expected to close by the end of this year, subject to customary closing conditions.
Both the companies also entered into a strategic relationship to improve the investment technology solutions that they offer to financial advisers and other clients.
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Envestnet president Bill Crager said: “Envestnet is uniquely positioned to create the premier financial wellness network. Integrating BlackRock Digital Wealth offerings into the Envestnet platform represents an industry milestone, advancing advisers’ ability to help investors meet their financial goals.”
BlackRock global head of digital wealth Venu Krishnamurthy said: “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.
“Through this strategic relationship, we aim to bring BlackRock Digital Wealth’s solutions to Envestnet’s clients in a modern, highly integrated way.”
BlackRock Digital Wealth focuses on providing new technologies to advisors assisting them to develop better portfolios, while Envestnet offers open architecture platforms to the financial advisors in the wealth management industry.