NEW YORK - ACA Group, a prominent governance, risk, and compliance (GRC) advisory firm, has announced its plan to acquire the broker-dealer distribution business from UMB Fund Services, a subsidiary of UMB Financial (NASDAQ:UMBF) Corporation (NASDAQ:UMBF). The acquisition is slated to be finalized in the fourth quarter of 2024.
The purchase will further cement ACA’s distribution division, ACA Foreside, as a leading third-party distributor, currently overseeing $2 trillion in assets across numerous fund families. With the addition of UMB's distribution business, ACA Foreside will incorporate over $48 billion in client assets, including mutual fund, exchange-traded fund (ETF), and closed-end fund products.
Chris Lanza, Partner and Co-head of ACA Foreside, expressed enthusiasm about the acquisition, highlighting it as a critical step in ACA's mission to redefine the financial services landscape. Patrick Olson, ACA’s CEO, echoed this sentiment, noting the acquisition's alignment with the company's strategic growth and market expansion goals.
ACA Foreside will assume responsibilities that include legal underwriting services, marketing material review, and maintenance of broker-dealer selling agreements. This marks ACA's sixth acquisition in three years, demonstrating its aggressive expansion strategy in the financial services industry.
Maureen Quill, Executive Vice President, Executive Director for Registered Funds of UMB Fund Services, assured that UMB will continue to serve many of the clients through its core services. Quill also expressed confidence in a smooth transition for clients transitioning to ACA Foreside's distribution services.
The financial terms of the transaction have not been disclosed.
ACA Group, with a team of over 1,250 members, including former regulators, has been a leading GRC advisor in financial services for over two decades. The company's services combine advisory, managed services, distribution solutions, and analytics with its ComplianceAlpha® technology platform. UMB Fund Services, based in Milwaukee, Wisconsin, offers a range of services to the fund industry, including fund administration and accounting, and serves more than 360 clients with assets exceeding $440 billion as of April 30, 2024.
The information in this article is based on a press release statement.
InvestingPro Insights
As UMB Financial Corporation (NASDAQ:UMBF) makes headlines with its strategic business divestiture to ACA Group, the company's financial health remains a cornerstone for investors. According to InvestingPro metrics, UMB Financial Corporation boasts a market capitalization of $3.85 billion, reflecting its solid presence in the market. The firm's P/E ratio, a measure of its current share price relative to its per-share earnings, stands at 10.43, suggesting that UMBF's shares might be reasonably valued in comparison to industry peers.
Investors may find UMBF's consistent dividend performance particularly reassuring. An InvestingPro Tip highlights that UMBF has not only maintained but also raised its dividend for an impressive 54 consecutive years, underscoring its commitment to shareholder returns. Moreover, the company's dividend yield as of the latest available data is 1.98%, offering a steady income stream for dividend-focused investors.
On the earnings front, optimism seems to be in the air as 6 analysts have revised their earnings projections upwards for the upcoming period. This sentiment is further supported by UMBF's reported profitability over the last twelve months, a positive sign for potential investors looking for financially sound companies. For those interested in a deeper dive into the company's financials, InvestingPro offers additional insights, with a total of 6 InvestingPro Tips available, which can be accessed with the exclusive coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
While UMBF's recent price performance has seen some volatility, with a 1 week price total return of -3.93%, the company's long-term prospects are reflected in a robust 1 year price total return of 35.39%. This could indicate investor confidence in the company's ability to navigate market challenges and leverage opportunities for growth, such as the recent transaction with ACA Group.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.