State Street Corp. (NYSE: STT) and Brown Brothers Harriman & Co. have entered into a definitive agreement for State Street to acquire BBH’s investor services business, including its custody, accounting, fund administration, global markets and technology services, for $3.5 billion in cash.
“The Investment Servicing industry enjoys strong fundamentals as worldwide growth in financial assets drives industry revenues. This combination with BBH Investor Services helps us consolidate our position as the industry innovator and leader,” said Ron O’Hanley, chairman and chief executive officer of State Street Corporation. “We are enhancing our leadership position across a range of services, augmenting our position in a number of key markets, growing relationships with many of the leading global asset managers and owners, and increasing our capabilities and scale. Additionally, BBH Investor Services brings us strong talent, including industry leading service excellence and quality execution.”
“We made this decision after careful consideration of the current and future landscape of the global securities servicing industry, including how best to support and innovate for the growing breadth and complexity of our clients’ servicing requirements,” said Bill Tyree, managing partner of BBH. “State Street is the ideal partner – a firm that shares our core values of unmatched client service, integrity, trust, and a long-term commitment to sustainability.”
Upon closing of the transaction, BBH Investor Services employees will move to State Street. The senior management team will transition to State Street in executive leadership roles, and Seán Páircéir, currently partner and global head of investor services at BBH, will join State Street’s management committee.
“One of the most attractive elements for us is BBH Investor Services’ first-rate talent and team of professionals with client service excellence, which strengthens our value proposition and is completely aligned with our focus and vision of being our clients’ enterprise outsourcer and essential partner,” added O’Hanley.
“We found in State Street a partner who shares our singular focus on delivering exceptional client outcomes, without exception,” said Páircéir. “We are committed to adopting best practices from both organizations to create an unmatched offering for the world’s most sophisticated asset managers and financial institutions.”
Goldman Sachs & Co. LLC served as financial advisor and Davis Polk & Wardwell LLP served as legal advisor to State Street in connection with the transaction. Lazard served as financial advisor and Sullivan & Cromwell LLP served as legal advisor to BBH in connection with the transaction.