SEI to acquire majority stake in Stratos Wealth for $527 million

OAKS, Pa. - Financial technology provider SEI (NASDAQ:SEIC), an $11.6 billion market cap company currently trading near its 52-week high of $93.82, announced Friday it will acquire a 57.5% stake in Stratos Wealth Holdings for approximately $527 million in cash, forming a strategic partnership aimed at supporting financial advisors. According to InvestingPro data, SEI maintains a "GREAT" financial health score, positioning it well for this strategic acquisition.

The transaction will be completed in two phases, with the U.S.-based Stratos business expected to close in the second half of 2025, followed by the Mexico-based NSC business in the first half of 2026, subject to regulatory approvals. SEI approaches this expansion from a position of strength, with InvestingPro analysis showing impressive revenue growth of 10.3% and a 38-year track record of consistent dividend payments.

Under the agreement, Stratos will continue operating under its own brand as an affiliated business of SEI. Jeff Concepcion will remain as CEO, and the company will maintain its existing business model and custodial relationships while gaining access to SEI’s technology, custody, operations, and asset management capabilities.

The deal includes put/call rights that could eventually result in SEI owning 100% of the entity, while current investor Emigrant Partners will exit its position at closing.

"We’re making a strategic investment that reinforces our unwavering belief in financial advisors and their delivery of advice," said Ryan Hicke, CEO of SEI, in the press release statement.

Stratos, headquartered in Beachwood, Ohio, comprises a network of more than 360 financial advisors across 26 states, with its advisors servicing over $37 billion in client assets. SEI currently manages, advises, or administers approximately $1.6 trillion in assets as of March 31, 2025. The company’s robust financial position is reflected in its strong profitability metrics, with a gross profit margin of 79% and return on equity of 27%. For deeper insights into SEI’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks with expert analysis and actionable intelligence.

The partnership aims to help advisors scale their businesses while addressing industry challenges such as succession planning and business transitions.

Goldman Sachs served as financial advisor to Stratos, while Wells Fargo advised SEI on the transaction.

In other recent news, SEI Investments Company reported its Q1 2025 earnings, exceeding analyst expectations with an earnings per share (EPS) of $1.17, compared to the projected $1.15. However, the company’s revenue was slightly below forecasts, at $551.34 million versus the expected $556.76 million. Despite the revenue miss, SEI demonstrated strong financial performance with an operating profit margin of 28.5%, the highest in three years. The company also declared a regular semi-annual dividend of $0.49 per share, reflecting its commitment to returning value to shareholders. In terms of analyst perspectives, Raymond James raised its price target for SEI Investments to $115, citing sustained improvement in sales and expanded operating margins. Conversely, Piper Sandler adjusted its price target to $79 while maintaining a Neutral rating, noting potential margin pressures in future quarters. SEI also announced leadership promotions to strengthen its traditional investment arm, aiming to enhance client service and business development strategies. These developments highlight SEI’s strategic focus on growth and operational efficiency amid market uncertainties.

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