Chicago-headquartered Envestnet announced that BlackRock would be taking a 4.9% stake in a deal valued at $122.8 million, expected to close by the end of the year. The two companies will also enter into a strategic relationship based on integrating BlackRock’s digital technologies into the fintech’s platform.
“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,” said Venu Krishnamurthy, global head of Digital Wealth for BlackRock. “Through this strategic relationship, we aim to bring BlackRock Digital Wealth’s solutions to Envestnet’s clients in a modern, highly integrated way.”
The financial details are as follows: BlackRock will acquire an equity stake in Envestnet of approximately 4.9% by purchasing from Envestnet approximately 2.36 million shares of Envestnet common stock for a purchase price of $52.13 per share and an aggregate purchase price of approximately $122.8 million. In addition, Envestnet will issue to BlackRock a warrant to purchase approximately 470,000 shares of Envestnet common stock at an exercise price of $65.16 per share, subject to customary anti-dilution adjustments. The Warrant is exercisable at the option of BlackRock for four years from the date of issue.