Principal Financial Group Inc · NASDAQ:PFG
Principal Financial — Merger or Acquisition (April 2019)
10 slides from Principal Financial's merger presentation, Apr 9, 2019
Slide 1: Principal to acquire Wells Fargo Institutional Retirement & Trust business
Principal to acquire Wells Fargo Institutional Retirement & Trust business April 9, 2019
Slide 2: Forward looking statements
Forward looking statements Certain statements made by the company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to non-GAAP operating earnings, net income attributable to PFG, net cash flow, realized and unrealized gains and
Slide 3: Use of non-GAAP financial measures
Use of non-GAAP financial measures The company uses a number of non-GAAP financial measures that management believes are useful to investors because they illustrate the performance of normal, ongoing operations, which is important in understanding and evaluating the company’s financial condition and
Slide 4: Overview of the acquisition
Overview of the acquisition • Principal will acquire Wells Fargo’s defined contribution, defined benefit, executive deferred compensation (non-qualified plans), institutional trust and custody, and institutional asset advisory businesses; expected to close third quarter 2019 • Brings together two ve
Slide 5: Strengthening our position in the U.S. retirement market
Strengthening our position in the U.S. retirement market Becoming the #3 Defined Contribution recordkeeper by participants 18,000 Alight Conduent 2,4001,600 BAML 1,400 Schwab 1,200 Wells Fargo Milliman 1,000 Prudential 800 600 Fidelity Participants Participants Plan per Vanguard T. Rowe Price Princi
Slide 6: Wells Fargo Institutional Retirement and Trust business by the numbers
Wells Fargo Institutional Retirement and Trust business By the numbers1 Description • 5,000 plans • DC recordkeeping solution for plan Defined Contribution (DC) sponsors and participants focused predominately on mid-case market • 3.9 million participants • Bundled retirement solutions, including • $
Slide 7: Doubles the size of our retirement AUA and participants
Doubles the size of our retirement AUA and participants1 • Solidifies our footprint in the SMB market • Pro-forma rankings1: o #3 Defined Contribution recordkeeper (by number of participants) o #4 Defined Contribution recordkeeper (by number of plans) Strategic o #1 Defined Benefit recordkeeper (by
Slide 8: Enhances Principal Total Retirement Suite
Enhances Principal Total Retirement SuiteSM Combined Retirement pro-forma Participant count1 #5 #9 #3 1 Scale and AUA #8 #10 #7 diversification By plan size in Defined Small (<$10M) - Contribution Mid-size ($10M - $1B) Large ($1B+) DB plan services Breadth of other Deferred com
Slide 9: Defined Contribution: SMB market remains core
Defined Contribution: SMB market remains core Over 80% of our AUA remains in the SMB market compared to 54% in the industry (Split of DC AUA by plan size) 88% SMB 12% $1B+ <$10M $10M - $1B 12% 26% Principal + Wells Fargo Industry $200B Pro-forma AUA1 19% $1B+ 81% SMB 54% SMB <$10M <$10M 62%
Slide 10: Key financial metrics
Key financial metrics Excludes $95M pre-tax of expected transaction and integration costs over 3 years and estimated impacts of earnout liability accounting over 2 years Consideration • $1.2B purchase price • Earnout of up to $150M if existing client fee revenue retentionProfitability exceeds expect
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