MassMutual to Acquire The First Mercantile Trust Company from SunTrust Banks, Inc.
Agreement will expand MassMutual’s Retirement Services business; An “important strategic step forward”
(Springfield, Mass.) - Massachusetts Mutual Life Insurance Company (MassMutual) today announced an agreement to purchase The First Mercantile Trust Company from SunTrust Banks, Inc. (NYSE: STI).
Headquartered in Memphis, Tennessee, First Mercantile provides retirement plan recordkeeping and investment management services nationally to more than 3,100 plans with a total of approximately 140,000 participants. With nearly $5 billion in assets under management as of Dec. 31, 2007, First Mercantile’s operations will add complementary products and further scale to MassMutual’s existing $40 billion retirement plan business.
“With an extensive distribution network that includes a strong base of registered investment advisors, broad and complementary product offerings, and tradition of working closely with clients to offer premier retirement services programs, First Mercantile makes an excellent strategic fit for MassMutual’s Retirement Services business,” said Elaine A. Sarsynski, Executive Vice President of MassMutual’s Retirement Services Division. “This acquisition is an important strategic step forward as we continue to build momentum in the marketplace.”
Ms. Sarsynski added that collective trusts offered by First Mercantile represent an outstanding opportunity for MassMutual in the important institutional investment market landscape.
First Mercantile will retain its headquarters location. The company’s current management team, including President Alan Dunaway and Chief Operating Officer James Pratt, will remain with the business and retain ongoing responsibility for First Mercantile’s daily operations.
The planned purchase by MassMutual is subject to regulatory approvals and is expected to close early in the second quarter of 2008. “We look forward to completing this transaction and welcoming the First Mercantile management team and employees into the MassMutual Financial Group family of companies,” Ms. Sarsynski said.
First Mercantile provides retirement plans and products to individuals and businesses across the U.S., focusing on the market for plans with $1 million to $20 million in assets and, in general, 50 to 250 employees. The company also serves as trustee and fiduciary to more than 180 collective investment trusts.
“MassMutual is a leader in financial services, not only from a products and services perspective, but in its visionary approach to the retirement services marketplace. As the newest member of the MassMutual family, we are excited about the opportunities for growth here at First Mercantile and for our valued distribution relationships,” Mr. Dunaway stated.
With more than 125 employees, First Mercantile delivers its product to the retail marketplace through investment consultants, brokerage firms, trust companies and financial institutions.
“This transaction streamlines our retirement product offerings consistent with our ongoing commitment to efficiently provide one-stop shopping for bundled retirement services,” said David Eidson, Executive Vice President of SunTrust Banks, Inc. “First Mercantile has a very attractive, unbundled product sold through independent financial consultants. Their product offering and delivery channel are clearly aligned with MassMutual’s long term strategic objectives, so this is a very positive transaction for all parties involved.”
Terms of the transaction were not disclosed.
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