How Morgan Stanley's $900M acquisition of Canada's Solium Capital compares to previous M&A transactions, the valuations of still-private equity administration software players, and the strategy behind the bank's acquisition.
On Monday, Morgan Stanley announced its acquisition of equity administration, financial reporting, and compliance software-as-a-service provider Solium Capital for $900M.
Solium manages the equity plans of 1M employees across more than 3,000 companies including Instacart, Shopify, and Stripe. The acquisition will grow Morgan Stanley’s equity administration business to 3,320 clients with 2.5M participants.
Solium and Morgan Stanley first linked up in November 2016, when Morgan Stanley licensed Solium’s equity administration platform to support its Global Stock Plan Services business in the US.
For Morgan Stanley, two potential opportunities from the acquisition stand out: cross-selling Solium’s clients into Morgan Stanley’s wealth management business, and increasing the cachet of the investment bank in the competitive tech IPO market.
We used the CB Insights M&A database to see why the Solium deal is a game changer in the equity plan management software space.
