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Market Analysis
UBS Axes its $1.4B Wealthfront Deal
Wealthfront announced today that the companies agreed to terminate the agreement made in January.
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On Friday, September 2nd, Wealthfront announced it will remain an independent company. The robo advisor was set to be acquired by UBS following an agreement reached in January. The termination of the deal appears to be based on an agreement between the two companies.
The UBS-Wealthfront Deal Terminated
This Friday, Wealthfornt announced it would be going forward as an independent company despite an earlier acquisition agreement that was supposed to be completed in the second half of 2022. This decision appears to be based upon a mutual agreement between the robo advisor and the Swiss bank UBS.
However, UBS still appears to be keen on accessing the American markets and has given Wealthfront nearly $70 million as a part of the $1.4 billion valuation. The two companies stated that they are still looking for ways to strengthen their partnership.
Today we announced that together with UBS we decided to terminate our pending acquisition and will instead remain an independent company. We are continuing to explore ways to work together in a partnership and UBS has given us $70 M in financing at a $1.4 B valuation.
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What Did the Agreement Between UBS and Wealthfront Entail?
In January 2022, UBS announced it was seeking to acquire Wealthfront at a price of $1.4 billion. This was a part of the Swiss bank’s drive to access the American markets more extensively.
UBS and Wealthfront, an industry-leading, automated wealth management provider serving the next generation of investors, signed an agreement whereby UBS would acquire Wealthfront in an all-cash transaction valued at $1.4 billion. Through this acquisition, UBS will accelerate its growth ambitions in the US, broaden the firm’s reach among affluent investors and expand its distribution and capabilities.
At the time, UBS explained that partnering with Wealthfront would not only enable the banks to access the American markets to a greater extent but would help it do business with the mostly Millenial and Gen Z user base of the robo advisor. The January statement also announced that Wealthfront’s existing clients would see no immediate changes but could expect to benefit from “UBS’s breadth of products, services, and intellectual capital.”
Do you think Wealthfront will benefit from staying independent? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
