BNY Mellon Strikes Deal to Acquire Milestone Group; Builds Digital Solutions

The Bank of New York Mellon (BK) has signed a deal to acquire Milestone Group, a fund and investment automation services company. Following the announcement, shares of the financial services provider declined 2.3% in Thursday’s trading session. The financial terms of the deal have not been disclosed yet.

The companies expect to close the transaction in the second half of 2021, after fulfilling customary conditions and approvals.

Last year, both the companies had joined hands to create a suite of oversight and contingent net asset value (NAV) services for asset managers and asset owners seeking independent oversight and backup NAV capabilities.

With this deal, BNY Mellon will have access to Milestone’s pControl™ platform, which will expand BNY Mellon’s digital offerings and core capabilities. Also, clients will be able to choose from existing and new end-to-end solutions that add operating model choices, strategic product capabilities and industry connectivity. (See BNY Mellon stock chart on TipRanks)

The CEO of Asset Servicing and Head of Digital at BNY Mellon, Roman Regelman, said, “We gain both industry-leading technology as well as the expertise that Milestone is known for globally. This is a significant step in our continuous evolution — blending leading edge technologies and services to deliver greater efficiency and value for our clients.”

On July 5, Evercore ISI analyst Glenn Schorr reiterated a Hold rating on the stock with a price target of $52 (7.6% upside potential from current levels). The analyst expects BNY Mellon’s earnings to break even in the third quarter of 2021.

The rest of the Street is cautiously optimistic on the stock with a Moderate Buy consensus rating based on 4 Buys and 4 Holds. The average BNY Mellon price target of $54.13 implies 12% upside potential from current levels.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in BNY Mellon is currently Neutral, as the cumulative change in holdings across all 17 hedge funds that were active in the last quarter witnessed an increase of 3.1 million shares.

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