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JPMorgan (JPM) Closes Buyout of Ireland-Based Global Shares

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JPMorgan (JPM - Free Report) has wrapped up the acquisition of Global Shares, a fintech firm. The financial terms of the transaction, announced this March, haven’t been disclosed.

Ireland-based Global Shares, through its cloud-based platform, helps businesses manage employee stock plans. The firm, through its offices across Europe, the Middle East & Africa, North America and the Asia Pacific, has 650 corporate clients and roughly $200 billion in assets under administration.

Global Shares will be integrated into JPMorgan’s Asset & Wealth Management (AWM) segment. The firm will continue to be based out of its current location.

Now, with the addition of Global Shares, JPM will become of the major providers of state-of-the-art “employee ownership solutions to private and public companies” across the globe. Companies and employees will gain from Global Shares' share plan services and JPMorgan's wide-ranging suite of wealth management, executive financial services and other banking products and services.

At the time of announcing the deal, Tim Houstoun, the CEO of Global Shares, had said, "We are tremendously excited to partner with J.P. Morgan and to continue on our journey of being a leading player in equity incentive services. Together, we will accelerate the expansion of our business globally as well as the range of services we offer to our clients and their employees.”

Further, Mary Callahan Erdoes, the CEO of AWM segment, added, “The addition of Global Shares is complementary across our entire J.P. Morgan franchise from new client acquisition for our Global Private Bank and U.S. Wealth Management businesses to providing new, innovative capabilities to private and public companies globally and helping their employees manage their wealth.”

Our Viewpoint

JPMorgan is prioritizing strategic on-bolt buyouts to expand in new avenues of revenues, both domestic and international. In January, the company agreed to acquire a 49% stake in Greece-based Viva Wallet Holdings Software Development S.A., a cloud-based payments fintech company.

In 2021, the company announced several acquisitions. Some notable ones are a 75% stake in Volkswagen's payment arm Volkswagen Financial Services, OpenInvest, 40% stake in Brazil's C6 Bank, the U.K.-based robo-advisor Netmeg, and 55ip. Also, it has launched its digital retail bank Chase in the U.K. and continues to expand operations in China. Thus, these efforts are expected to keep supporting JPMorgan's plan to diversify revenues and expand fee income product suite and consumer bank digitally.

Other than JPM, several other banks like Truist Financial (TFC - Free Report) and Citizens Financial Group, Inc. (CFG - Free Report) are undertaking opportunistic acquisitions to diversify revenues and improve market share.

Earlier this month, TFC, through its subsidiary, Truist Insurance Holdings, entered an agreement to buy the nation’s largest benefits wholesale general agency, BenefitMall, from funds managed by The Carlyle Group Inc. While the financial terms of the deal have not been disclosed yet, the transaction is expected to close in the third quarter of 2022.

The acquisition is expected to add $150 million in annual revenues to Truist Insurance Holdings’ wholesale division.

Likewise, Citizens Financial is on a buyout spree. This July, the company announced plans to acquire Paladin Advisors, an independent, registered investment advisor, to strengthen its private wealth management business.

Earlier, CFG closed the acquisitions of DH Capital LLC and Investors Bancorp, while in February, it closed the buyout of 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A. These and other buyouts enable the company to expand its product capabilities and geographic reach.

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