State Street, a provider of financial services to institutional investors, has signed an acquisition agreement with Italy-based Intesa Sanpaolo, to acquire its Securities Services (ISPSS) business, with operations in Italy and Luxembourg, for approximately EUR1.28bn in cash at closing.
State Street would acquire the global custody, depository banking, correspondent banking and fund administration portions of the ISPSS business. In addition, assuming the cash balances in the business are consistent with levels at June 30, 2009, State Street expects to acquire approximately EUR11bn in cash deposits at closing.
Revenue in 2009 for the ISPSS businesses that would be acquired by State Street is expected to be approximately EUR293m. The agreement also includes a long-term investment servicing arrangement with ISP to service all of its investment management affiliates, including Eurizon Capital, an Italy-based fund manager with approximately EUR135bn in assets under management as of September 30, 2009.
Upon closing the transaction, State Street would assume approximately 555 new employees, with approximately 420 in Italy and 135 in Luxembourg.
Jay Hooley, president and chief operating officer of State Street, said: “This transaction is consistent with our long-term strategic plan to increase State Street’s scale and presence in high-growth markets outside of the US.
“It will also provide State Street with access to a new customer base to which we can cross-sell additional products and services and will give us additional traction in the insurance market. Lastly, this acquisition will provide us with a long-term servicing relationship with one of Europe’s premier fund managers.”
The closure of acquisition is anticipated to occur during the second quarter of 2010. However, the transaction is subject to regulatory approvals and satisfaction of other closing conditions.
