AP News

Charles Schwab agrees to buy smaller money manager


SAN FRANCISCO (AP) — The Charles Schwab Corp. has agreed to acquire dividend income specialist ThomasPartners Inc. for an upfront payment of $85 million, plus additional payments if the smaller company can attract more investors.

Schwab, an investment services giant based in San Francisco, said Monday that the acquisition is unlikely to affect its earnings in the first 12 months after it closes. Schwab expects a minor boost to its earnings per share in the following year.

ThomasPartners, based in Wellesley, Mass., is an asset manager focused on dividend income. It had $2.3 billion under management as of Sept. 30, mostly in growth-oriented stocks that pay dividends. ThomasPartners has consistently outperformed competitors over the nine-year history of its dividend product, Schwab said.

Under the deal, ThomasPartners' top two executives will remain with the firm: CEO and Chairman Gregory Thomas and President, Chief Operating Officer and Chief Investment Officer William McMahon. ThomasPartners' money management solutions will be made available to clients of investment advisers that use the Schwab Advisor Services platform.

In addition, Schwab retail clients will be able to invest in ThomasPartners' portfolios. Schwab clients already have $124 billion of assets in advised accounts.

Additional payments beyond the upfront $85 million are contingent on future growth in assets under management, Schwab said.

The deal is scheduled to close in the fourth quarter, subject to customary closing conditions.

Schwab fell a penny in pre-market trading to $12.94.


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