Nationwide Financial subsidiary TBG Financial and Mullin Consulting join
forces to create the largest provider of non-qualified executive benefits
COLUMBUS, Ohio, March 28 /PRNewswire-FirstCall/ -- Nationwide Financial
Services, Inc. (NYSE: NFS), a leading provider of long-term savings and
retirement products, today announced that TBG Financial, its Los Angeles-
based, majority-owned subsidiary, will be joining together its business with
the business of Los Angeles- and Chicago-based Mullin Consulting to become
MullinTBG, the largest full-service executive benefits firm in the United
States.
MullinTBG will administer more than 400 nonqualified benefit plans with
$15 billion in total assets representing more than 50,000 corporate
executives. A combined talent pool of more than 300 industry experts will
focus on developing cutting-edge compensation and benefits strategies that
deliver more value to corporations, while meeting the retirement income and
financial planning needs of their key executives.
As a result of the transaction, NFS expects to record a non-cash goodwill
impairment in the range of $5-6 million by the end of the first quarter of
2006. The impairment represents a write-down to fair value of the portion of
NFS' investment in TBG Financial that will be contributed to MullinTBG. TBG
Financial and Mullin Consulting will each own 50 percent of MullinTBG. NFS
will retain its majority ownership interest in TBG Financial following the
transaction.
"We are very excited about the strategic opportunity that the transaction
represents," said Mark R. Thresher, president and chief operating officer of
NFS. "The combined entity will be a market leader with a more efficient back
office and distribution platform to serve the executive benefits market."
"This is an extraordinary opportunity to create the premier executive
benefits organization from two market-leading companies," said Mullin
Consulting Chairman Peter Mullin. "The depth of talent and experience,
together with a proud heritage of technological and product innovation, yields
a powerful combination that is unparalleled in this industry."
With complementary expertise in the design, funding and administration of
executive benefit programs, the two organizations are joining forces to better
serve the long-term and increasingly complex benefit needs of companies and
their key executives. Leveraging their combined strengths and resources,
MullinTBG has a greater capacity to offer an expanded array of benefits
tailored to individual financial goals.
Peter Mullin will be chairman of MullinTBG. He is a recognized executive
benefits pioneer whose history of innovation at the helm of Mullin Consulting
has spanned more than four decades. Michael Shute, CEO of TBG Financial, will
assume chief executive officer duties for the new company. Mullin Consulting
President and CEO James Clary will assume the role of MullinTBG president.
MullinTBG will be headquartered in Los Angeles with regional offices in
Baltimore, Chicago, Dallas, Minneapolis, New York, Newport Beach, Pittsburgh
and Washington D.C.
Columbus-based Nationwide Financial is the holding company for the
domestic retirement savings operations of Nationwide, which owns 62.7 percent
of the outstanding common shares of Nationwide Financial. The major operating
subsidiary of Nationwide Financial is Nationwide Life Insurance Company. To
obtain investor materials, including the Company's annual report to
shareholders, Annual Report on Form 10-K and other corporate announcements,
please visit the investor relations section of our Web site at
http://www.nationwidefinancial.com.
Forward-Looking Information
The information included herein contains certain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 with respect to the results of operations and businesses of the
Nationwide Financial Services, Inc. and subsidiaries (NFS or collectively, the
Company). These forward-looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially from
those contemplated or projected, forecast, estimated or budgeted in such
forward-looking statements include, among other, the following possibilities:
(i) change in Nationwide Corporation's control of the Company through its
beneficial ownership of 94.4% of the combined voting power of all the
outstanding common stock and 62.7% of the economic interest in the Company;
(ii) the Company's primary reliance, as a holding company, on dividends from
its subsidiaries to meet debt service obligations and the applicable
regulatory restrictions on the ability of the Company's subsidiaries to pay
such dividends; (iii) the potential impact on the Company's reported net
income and related disclosures that could result from the adoption of certain
accounting and/or financial reporting standards issued by the Financial
Accounting Standards Board, the United States Securities and Exchange
Commission or other standard-setting bodies; (iv) tax law changes impacting
the tax treatment of life insurance and investment products; (v) repeal of the
federal estate tax; (vi) heightened competition, including specifically the
intensification of price competition, the entry of new competitors and the
development of new products by new and existing competitors; (vii) adverse
state and federal legislation and regulation, including limitations on premium
levels, increases in minimum capital and reserves, and other financial
viability requirements; restrictions on mutual fund distribution payment
arrangements such as revenue sharing and 12b-1 payments; and regulation
changes resulting from industry practice investigations; (viii) failure to
expand distribution channels in order to obtain new customers or failure to
retain existing customers; (ix) inability to carry out marketing and sales
plans, including, among others, development of new products and/or changes to
certain existing products and acceptance of the new and/or revised products in
the market; (x) changes in interest rates and the equity markets causing a
reduction of investment income and/or asset fees; an acceleration of the
amortization of deferred policy acquisition costs (DAC) and/or value of
business acquired (VOBA); or a reduction in the demand for the Company's
products; (xi) reduction in the value of the Company's investment portfolio as
a result of changes in interest rates and yields in the market as well as
geopolitical conditions and political, regulatory, judicial, economic or
financial events affecting the market generally and companies in the Company's
investment portfolio specifically; (xii) general economic and business
conditions which are less favorable than expected; (xiii) competitive,
regulatory or tax changes that affect the cost of, or demand for, the
Company's products; (xiv) unanticipated changes in industry trends and ratings
assigned by nationally recognized rating organizations; (xv) settlement of tax
liabilities for amounts that differ significantly from those recorded on the
balance sheet; (xvi) deviations from assumptions regarding future persistency,
mortality, morbidity and interest rates used in calculating reserve amounts
and in pricing the Company's products; and (xvii) adverse litigation results
and/or resolution of litigation and/or arbitration or investigation results.
Nationwide, Nationwide Financial and the Nationwide Framemark are
federally registered service marks of Nationwide Mutual Insurance Company. On
Your Side is a service mark of Nationwide Mutual Insurance Company.
Investor Contact
Mark Barnett
Vice President, Investor Relations
614-677-5331
Media Contact:
Dan Orzano
Corporate Communications
614-677-5115
SOURCE Nationwide Financial Services, Inc.
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Related links:
http://www.nationwidefinancial.com
CONTACT:
Media, Dan Orzano, Corporate Communications,
+1-614-677-5115, or Investors, Mark Barnett, Vice President,
Investor Relations, +1-614-677-5331, both of Nationwide Financial
Services, Inc.
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