Broadridge Financial Solutions Inc. announced Tuesday that it is buying NewRiver Inc. for $77 million.
According to industry experts and analysts the acquisition will broaden Broadridge's compliance communication and electronic document delivery capabilities.
“This will give Broadridge access to better straight through processing of annuities and other packaged investment products, an area of major focus in the broker-dealer world right now,” said Doug Dannemiller, a senior analyst in the wealth management practice at Aite Group LLC.
“This is an area where there is plenty of room for building in efficiencies,” he added.
Broadridge is a well-known provider of technology-based outsourcing solutions for the financial services industry.
The company already has a history of
collaboration with NewRiver, most recently having partnered to provide their Prospectus Express and Virtual Document Warehouse products for pre-sales and first-dollar deliveries in the brokerage market back in March of last year. They have also been an important supplier to Broadridge for nearly 10 years.
“Broadridge's acquisition of NewRiver is a natural strategic fit, as evidenced by the success of the joint solution we extended the industry last year in response to the SEC's Summary Prospectus rule,” said NewRiver chief executive Russell Planitzer in a prepared statement.
NewRiver, founded in 1995, has been a pioneer in the area of electronic prospectus delivery and its current clients include brokerage firms, mutual funds, variable annuity insurers, as well as retirement plan administrators.
Combining the two companies should help Broadridge fast-track its electronic document delivery capabilities.
Specifically referenced in this week's prepared statement was NewRiver's database of content and its Fundpoint compliance and productivity tool.
“A well-integrated NewRiver functionality should bring Broadridge full circle,” said Aite's Dannemiller.
“Broadridge already acquired Investigo a few years ago which essentially took care of the back end of the process,” he said.
Broadridge completed its acquisition of Investigo Corp. in August of 2008.
Investigo provides financial services companies with data consolidation from multiple sources, including clearing houses, custodians and back-office systems.
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