Ascensus CEO David Musto Explains Blockbuster Newport Group Merger

Ascensus

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Independent recordkeeping giant Ascensus will merge with Newport Group, the companies said Wednesday. The newly combined organization will offer a wider set of “capabilities and products to benefit institutional partners, clients, advisors, and savers,” according to the announcement. 

David Musto

“We saw a really great opportunity to band together with Newport to be able to bring a broader set of products and solutions to our respective clients and also really create a leader in the broader tax advantage savings markets across retirement, education, and health,” Ascensus President and CEO David Musto said. 

Musto added that the leadership team will look to maximize both firms’ technology capabilities pre- and post-close that their clients will use to drive better outcomes for savers.

“We’ve used acquisitions in a couple of ways, but I’d start with our focus on growing client relationships and driving more value in the market through investment in our own capabilities, products, and solutions,” he said. “We’ve been very successful doing that. Where we do see opportunities to accelerate the expansion of capability sets or to access segments of the market that we’ve not previously tapped to create additional scale, those are the opportunities that appeal to us. Newport checks the box across each one of those areas.”

Musto will serve as CEO of the combined company, and Newport CEO Greg Tschider has stepped down. Newport COO Laura Ramanis will become interim CEO “to ensure continuity of leadership, operations, and client service through closing,” and will then join the Ascensus executive leadership team.

“We’re not buying [just] anything. There are a lot of opportunities in the market that aren’t the right fit for us and where we’re not going to devote and commit time and resources,” Musto explained when asked about the company’s buying spree. “But where there are unique experiences to take advantage of what’s playing out in a transforming and consolidating marketplace, as a leader in the space, we’re certainly going to step up to the plate.”

The list of “strategically compelling” benefits to come from the combination include: 

Market strengths

Client, partner, and saver benefits

Associate benefits

The transaction is expected to close in the first quarter of 2022, subject to regulatory approval. Evercore acted as the financial advisor to Newport, with financing coming from Goldman Sachs, SPC Financing, and KKR Capital Markets. 

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