SEI
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 3, 2017
Date of report (Date of earliest event reported)
SEI Investments Company
(Exact name of registrant as specified in its charter)
Pennsylvania | 0-10200 | 23-1707341 | ||
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) | ||
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
(Address of principal executive offices) (Zip Code)
(610) 676-1000
(Registrants’ telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01. Other Events.
On Monday, July 3, 2017, the Company completed the acquisition of Archway Technology Partners, LLC, (“Archway”) a major provider of operating technologies and services to the single and multi-family family office industry and those institutions who service that market. Archway will be integrated into the Company's Investment Managers business segment during the three month period ending September 30, 2017.
A copy of the press release and presentation with additional information regarding the acquisition are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated in this Item 8.01 by reference.
As provided in General Instruction B.2 to Form 8-K, the information furnished in Item 8.01 and Exhibits 99.1 and 99.2 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing with the Securities and Exchange Commission, except as shall be expressly provided by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release dated July 5, 2017 of SEI Investments Company.
99.2 SEI Acquisition of Archway Technology Partners Presentation dated July 5, 2017.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SEI INVESTMENTS COMPANY | |||
Date: | July 5, 2017 | By: | /s/ Dennis J. McGonigle |
Dennis J. McGonigle Chief Financial Officer | |||
EXHIBIT INDEX
Exhibit
Number Description
99.1 Press Release dated July 5, 2017 of SEI Investments Company.
99.2 SEI Acquisition of Archway Technology Partners Presentation dated July 5, 2017.
Exhibit 99.1
Company Contact: Media Contact:
Dana Grosser Vu Chung
SEI Prosek Partners
+1 610-676-2459 +1 212-279-3115
dgrosser@seic.com vchung@prosek.com
Pages: 2
FOR IMMEDIATE RELEASE
SEI Expands Its Footprint in Family Office Services Arena With Acquisition of Archway Technology Partners
Transaction Positions SEI for Leadership in a Fragmented, Underserviced Market Segment
OAKS, Pa., July 5, 2017 - SEI (NASDAQ:SEIC) today announced it has acquired Archway Technology Partners, LLC, (“Archway”) a major provider of operating technologies and services to the family office industry and the institutions who service that market. The move further establishes SEI as a leading player in the family office segment, addressing additional verticals, including institutions, investment advisors, private banks, hedge funds, and private equity funds.
“This announcement represents a modest shift in SEI’s long-held belief in purely organic growth. We believe there is value in growing through carefully considered strategic acquisitions that add to our expanding geographic footprint, market reach, platform functionality and expertise,” said Alfred P. West, Jr., Chairman and CEO of SEI. “Archway’s stellar reputation in the family office industry, market-leading solutions, and talented, client-oriented employees make them a valuable addition to SEI, and we look forward to welcoming the Archway team into our culture and company.”
“Archway’s specialized technologies and deep knowledge of the private wealth services industry give us a more powerful, differentiated solution to a $7 trillion global family-office market that has been underserved by legacy service providers,” said Steve Meyer, Executive Vice President of SEI and Head of SEI’s Investment Manager Services division. “SEI’s operating solutions, enhanced by Archway’s capabilities, will help family offices, institutions, wealth managers, and asset owners better navigate this new operational frontier and service their clients more effectively.”
The acquisition expands SEI’s position to become the market leader in the single and multi-family office services arena, a segment in which Archway had been the dominant service provider. Archway’s reputation for its innovative technology and next-generation solutions were recently recognized by industry participants by winning in three categories at the 2017 Family Wealth Report Awards.
“Joining SEI will help us provide the next level of institutional-quality, state-of-the-art solutions to the family office and wealth management marketplace,” said Jason Brown, CEO of Archway. “SEI’s market
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Exhibit 99.1
focus and commitment to the broader asset management segments aligns directly with, and is uniquely complementary to, our focus on providing services to the family office, high-end wealth advisory, and institutional wealth management segments. Our two organizations also share a strong service ethic and culture of innovation that are perfectly suited to our unique and demanding client base. We are excited to be a part of the SEI family and look forward to the expanded opportunities that lie ahead for our combined organization.”
About SEI's Investment Manager Services Division
Investment Manager Services supplies investment organizations of all types with the advanced operating infrastructure they must have to evolve and compete in a landscape of escalating business challenges. SEI’s award-winning global operating platform provides asset managers and asset owners with customized and integrated capabilities across multiple investment vehicles, strategies, and jurisdictions. Our services enable investment managers to gain scale and efficiency, keep pace with marketplace demands, and run their businesses more strategically. SEI presently partners with more than 300 traditional, alternative and hybrid managers representing $15.5 trillion in assets, including 35 of the top 100 managers worldwide. For more information, visit seic.com/ims.
About SEI
SEI (NASDAQ:SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of March 31, 2017, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $779 billion in hedge, private equity, mutual fund and pooled or separately managed assets, including $297 billion in assets under management and $478 billion in client assets under administration. For more information, visit seic.com
About Archway Technology Partners
Archway Technology Partners, LLC (“Archway”) is a technology firm whose software solution supports the accounting, investment management and reporting functions for family offices, private banks, private wealth advisors and fund administrators. Archway’s primary objective is to help private wealth management firms better serve their ultra-high-net-worth clients through a single, integrated technology offering.
Archway’s proprietary software solution is designed to efficiently handle complex partnership, portfolio and corporate accounting alongside bill payment, investment management and multi-asset class data aggregation. Clients can choose to operate the web-hosted technology platform themselves through a software-as-a-service deployment or leverage Archway’s high-touch client service team for fully outsourced consolidated investment reporting, bill payment and partnership accounting services. For more information about Archway, please visit www.archwaytechnology.net.
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SEI Acquisition of
Archway Technology
Partners
July 5 2017
Exhibit 99.2
Safe Harbor Statement
This presentation includes forward-looking statements that are based on the current expectations of the management of
SEI and are subject to uncertainty and changes in circumstances. The forward-looking statements contained herein
include statements about the expected effects on SEI of the proposed acquisition of Archway, anticipated earnings
enhancements, synergies, and other strategic options and all other statements in this presentation other than statements
of historical fact. Forward-looking statements include, without limitation, statements typically containing words such as
“believes”, “plans”, “projects”, “forecasts”, “may”, “should”, “intends”, “expects”, “anticipates”, “targets”, “estimates” and
words of similar import. By their nature, forward-looking statements are not guarantees of future performance or results
and involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the
future.
There are a number of factors that could cause actual results and developments to differ materially from those expressed
or implied by such forward-looking statements. These factors include, but are not limited to, the inability to integrate
successfully Archway within SEI; the continuation of satisfactory arrangements with Archway’s customers, prospects,
management and employees, exposure to potential litigation and changes in anticipated costs related to the acquisition of
Archway or the conduct of its business. Additional factors that could cause actual results and developments to differ
materially include, among others, the state of the economy and the financial services industry, and the other potential
factors that could affect SEI as described in its filings with the Securities and Exchange Commission, including, but not
limited to, its Annual Report on Form 10-K for the fiscal year ended December 31, 2016. SEI undertakes no obligation to
update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Forward-
looking statements only speak as of the date on which they are made.
•SEI: a leading global provider of investment processing, investment management, and
investment operations solutions that help corporations, financial institutions, financial advisors,
and ultra-high-net-worth families create and manage wealth.
•Archway: pre-eminent family office technology platform; 200 clients; $230 bn assets
•Complementary combination establishes SEI as leading player in the family office market
serving additional verticals: institutions, investment advisors, hedge funds, private equity funds
•Part of the Investment Manager Services (IMS) segment
Combination
•Purchase price of $80 million plus growth earn-outs of up to $8 mm based on financial
targets
•No expected impact on capital allocation/utilization
Metrics
•Expense synergies: consulting, technology & infrastructure, sales & marketing, financial
•Operational synergies
•Revenue cross-sells
•Cultural fit
Synergies
SEI Acquisition of Archway Technology Partners
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• Expand into Family Office market
• Differentiated product and service offering
• Strong brand name, market reputation and top tier client base
Market Expansion
• Diversifies IMS business segment further into technology-based
offering / SaaS model
• Expands our current model and approach
Solution Expansion
• Expands component services and cross-sell opportunities
• Partnership accounting
• Bill pay
• Data reporting and aggregation
Cross Sell Oppty
• Opportunity to leverage capabilities across SEI’s other markets
• Banking, Advisor, Wealth Management
• Fund accounting: Hedge funds, Private Equity funds
• Data management
Leverage
Strategic Rationale
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Archway At-a-Glance
› Founded in 2002
› Archway is a technology firm whose software solution
supports the accounting, investment management and
reporting functions for family offices and service
providers to the family office market.
› Archway’s primary objective is to help single and multi-
family offices and those who service them with a single,
integrated technology offering.
› 200+ clients
› $230 bn assets on the platform
› Global clientele
› Headquarters in Indianapolis, Indiana
› Regional offices in New York and Denver
› 125 employees
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› Leading Provider to the Single and Multi-Family Office
Market
› Diversified Array of Leading Technology-Driven Offerings
› Recurring Revenue Model
› Opportunities for Expanded Sales Agendas and
Leverage
› Experienced and Innovative Leadership
› Broad independent Industry Recognition
$14.1
$17.9
$25.1
$1.0
$3.6
$5.6
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
2015A 2016A 2017E*
M
ill
io
n
s
Financial Performance
(unaudited)
REVENUE EBITDA
* Estimates based on Revenue of $11.2 mm and EBITDA of $3.1 mm
through Q2 2017 (unaudited)
Financial Impact
› Purchase price: $80 million with additional growth earn-outs (of up to $8
million) based on specific financial targets
› Amortization of intangible assets of approximately $50 million over 5 years
› Partially offset by expected short-term expense synergies of at least $2 million
› Longer-term growth opportunities
› Growth in existing client base
› Cross selling to Archway clients and SEI clients
› Small/Start-up hedge and private equity managers
› Additional functionality for other SEI segment clients
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