Goals-based tech firm will run as a stand-alone company after purchase by private-equity firm.
Wealth management technology firm Wealthcare Capital Management has signed a merger agreement with private-equity investment company NewSpring Holdings.
Wealthcare will continue to operate as a stand-alone company in its headquarters in Richmond, Va., but will bring on new executives. NewSpring, based in Radnor, Pa., plans to retain Wealthcare's 38 employees, who provide goals-based financial planning tools and wealth management services to financial advisers and their clients.
Terms weren't available but Newspring will acquire both the technology and registered investment advisory units of Wealthcare. The RIA has $800 million in assets under management. The deal is expected to close next month.
Mr. Reinhart declined to comment on the company's revenues.
Wealthcare's founder, chairman and chief executive, David Loeper, has announced his retirement. In a planned succession, Michael Ashker will replace him as chief executive, and Len Reinhart will become executive chairman.
Mr. Reinhart, who has been involved with Wealthcare since its inception in 1999, was the president of Smith Barney's Consulting Group, the founder and chief executive of the Lockwood family of companies and subsequently became chief executive of Pershing Managed Account Solutions, a division of Bank of New York Mellon Corp.
Mr. Ashker is an entrepreneur with experience in building platform-based businesses and was serving as a digital consultant to Wealthcare before being named CEO. He was founder and chief executive of Healthaxis, a digital insurance agency, and also was co-founder of an electronic legal filing system, JusticeLink, which was sold in 1999 to LexisNexis.
Mr. Reinhart introduced Mr. Ashker to Mr. Loeper a couple of years ago, when Mr. Ashker was seeking to enter the digital arena for advisers.
“I loved the platform and thought this was the future,” Mr. Ashker said. “I heard [Mr. Loeper] was looking for a buyer that would respect his philosophies, and Len and I said we would like to be the guys who pull a deal together.”
NewSpring focuses on buyouts and platform construction, targeting profitable, growing companies with between $5 and $25 million of revenue in the software, tech-enabled services and niche manufacturing sectors. The private-equity firm seeks to partner with family and founder-owned businesses in transition or that need a financial partner.
NewSpring Holdings is part of the NewSpring Capital family of funds, a provider of private-equity capital focused in the Mid-Atlantic region with more than $950 million of assets under management.
