BNY Mellon has bought PNCs Global Investment Servicing business (PNC GIS) for $2.31 billion. The deal will add $855 billion in assets under administration, including $460 billion in assets under custody, and double the number of funds serviced for accounting and administration.
PNC GIS came second in the Global Custodian Mutual Fund Administration Survey 2009, behind State Street. However, revenue for the PNC GIS unit in 2009 was down 50% year-on-year, to $63 million.
PNC still owes $7.6 billion in Troubled Asset Relief Program funds, and was eager to offload the worst performing sector in their business in order to raise capital.
The deal is expected to close in the third quarter of 2010, subject to necessary regulatory approvals.
This acquisition significantly strengthens our service offering and market share with asset managers and financial advisors, while delivering attractive returns to our shareholders, said Robert P. Kelly, BNY Mellon chairman and chief executive officer. We expect the transaction to accelerate our growth, deliver economies of scale and strengthen our leadership position for Asset Servicing and Pershing.
BNY Mellon will become the second largest provider of fund accounting, administration and transfer agency. PNC GIS placed third in the Global Custodian Hedge Fund Administration Survey 2009. BNY Mellon came eighth.
Stephen M. Wynne will remain as CEO of GIS, reporting to Tim Keaney and JimPalermo, co-heads of BNY Mellon Asset Servicing.