American bank holding company U.S. Bancorp (USB) announced that it has entered into a definitive agreement to acquire PFM Asset Management LLC. The acquisition will be carried out through U.S. Bancorp Asset Management, a subsidiary of U.S. Bancorp.
The financial terms of the deal, which is likely to close in the fourth quarter of 2021, has been kept under wraps.
Following the news release, shares of the company declined marginally to close at $55.01 in Thursday’s extended trading session.
Post the acquisition, PFM Asset Management will continue to operate as an independent entity. As of March 31, the combined assets under management of the two entities amounted to $325 billion. Notably, PFM’s financial advisory business will not be a part of this deal.
Head of U.S. Bancorp Asset Management Eric Thole said, “PFM Asset Management brings a wide array of client relationships and product offerings, including local government investment pools, outsourced chief investment officer services and separately managed accounts in both fixed income and multi-asset class strategies. These services complement U.S. Bank’s current book of business, and we’re thrilled to have the opportunity to increase our presence nationally and solidify U.S. Bank’s position as a leading provider of investment solutions.” (See U.S. Bancorp stock chart on TipRanks)
On July 8, RBC Capital analyst Gerard Cassidy reiterated a Buy rating on the stock with a price target of $62. The analyst’s price target implies upside potential of 12.65% from current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 7 Buys and 7 Holds. The average U.S. Bancorp price target of $62.73 implies that the stock has upside potential of 14% from current levels. Shares have gained 60.8% over the past year.
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