DES MOINES, Iowa - Principal Financial Group (NASDAQ:PFG)® has entered into a definitive agreement to acquire the employee stock ownership plan (ESOP) business of Ascensus, the company announced today. The acquisition will see Principal adding roughly 800 plans and over 165,000 participants, reinforcing its position as the leading ESOP service provider in the United States.
The transaction, which is expected to close by the end of the second quarter of 2024, will integrate Ascensus’ ESOP recordkeeping business, its ESOP Economics consulting group, and the Telescope™ software into Principal’s suite of workplace savings and retirement solutions. As part of the acquisition, all related products, clients, and employees will transition to Principal.
Teresa Hassara, Senior Vice President of Workplace Savings and Retirement Solutions at Principal, stated that the acquisition will enhance the company's scale and expertise. Andrew Matos, head of stock plan services for Retirement and Income Solutions at Principal, echoed Hassara's sentiments, emphasizing the complementary nature of Ascensus' ESOP business to Principal's retirement solutions.
Ascensus President Nick Good commented on the agreement, expressing confidence that the clients and associates transitioning will greatly benefit from Principal's leadership and capabilities in the ESOP market.
The acquisition comes at a time when the interest in ESOPs has been increasing, with a 39% rise in the creation of new ESOPs from 2020 to 2021. As of December 31, 2023, Principal and Ascensus collectively served more than 2,000 ESOPs and approximately 765,000 participants.
Financial terms of the deal have not been disclosed. Perella Weinberg Partners acted as the financial advisor to Principal, with Skadden, Arps, Slate, Meagher & Flom LLP serving as legal counsel.
This expansion is part of Principal's broader strategy to enhance its retirement services offerings. The company, which has been in business for over 140 years, is recognized for its commitment to ethical practices and diversity, including being named one of the 2024 World’s Most Ethical Companies® by Ethisphere.
The information in this article is based on a press release statement from Principal Financial Group.
InvestingPro Insights
As Principal Financial Group (NASDAQ:PFG) moves forward with its strategic acquisition of Ascensus’ ESOP business, the company's financial health and market performance become increasingly relevant for investors and industry observers alike. According to recent data from InvestingPro, Principal Financial Group boasts a robust market capitalization of 19.76 billion USD, reflecting the company’s significant presence in the financial services industry.
An analysis of Principal's stock reveals that it is trading near its 52-week high, with a price percentage of 97.29% of the high, indicating strong investor confidence and a potentially bullish outlook for the stock. This is further supported by the company's consistent history of dividend payments, having maintained them for 23 consecutive years, and an attractive dividend yield of 3.35% as of the latest data.
InvestingPro Tips highlight that Principal Financial Group has raised its dividend for 15 consecutive years, signaling a commitment to returning value to shareholders. Additionally, with six analysts having revised their earnings upwards for the upcoming period, there is an anticipation of continued financial growth. For investors looking to delve deeper into the company’s performance and future prospects, there are even more InvestingPro Tips available, providing a comprehensive analysis of Principal Financial Group’s potential.
For those interested in leveraging these insights, remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. With this information at hand, stakeholders can make more informed decisions as Principal Financial Group enhances its position in the ESOP market and expands its comprehensive suite of retirement solutions.
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