Morningstar has brokered a deal to acquire wealth management platform provider Praemium’s businesses in the UK, Jersey, Hong Kong, and Dubai for £35m in cash.
The deal consideration is subject to completion adjustments.
The transaction is subject to regulatory approval from the Financial Conduct Authority in the UK and the Jersey Financial Services Commission in Jersey. It is expected to close during the second or third quarter of 2022.
The Praemium UK and international businesses provide SaaS-based technology and services to help fee-based advisers to outsource the main elements of the advice workflow.
These units offer custody and administration through the Praemium platform, adviser practice management support through Wealthcraft, and discretionary investment management through Smart Investment Management.
The addition of Praemium’s end-to-end solution is expected to enhance Morningstar’s current capabilities in data, fund profiles, portfolio analytics, and investment management.
As part of the deal, the two companies will collaborate to ensure a smooth transition for customers and employees.
Morningstar wealth management solutions president Daniel Needham said: “Praemium has a fast-growing UK and international business and a talented team we look forward to welcoming to Morningstar.
“Advisers and the investors we jointly serve are no exception, and Praemium’s digital-first capabilities will allow us to reduce friction, lower costs, provide more choice, and improve efficiency for advisers. This gives advisers time back to deliver better advice, empowering investor success.”
Established in 2001 in Australia, Praemium expanded its footprint to the UK in 2006 and to Jersey in 2012.
The firm is offloading its UK and international businesses as part of a previously announced strategy to strengthen its focus on its financial and leadership resources on its domestic growth trajectory in the Australian platform market.
Praemium CEO Anthony Wamsteker said: “We are delighted Morningstar, a global firm of outstanding stature has chosen to acquire our international business.
“Morningstar will bring its global footprint and investment scale to better serve the interests of international clients and better advance the career opportunities of our international employees.”
Last year, Morningstar purchased Sustainalytics following its acquisition of a 40% stake in the ESG ratings and research firm in 2017.