Envestnet announced Friday it has entered into a definitive agreement to buy the wealth management solutions arm of Prudential Investments in an effort to increase scale.

Chicago-based Envestnet will pay $10 million in cash for the unit when the deal closes early in the third quarter and considerations of up to a total of $23 million in cash over a three-year period.

The deal would make Envestnet the largest independent wealth management platform, according to the company.

“The Prudential WMS team has demonstrated a keen understanding of the evolving challenges faced by their customers and has cultivated a long-term track record of providing value-added solutions. We look forward to integrating WMS’s expertise into our technology platform to provide best-in-class, scalable solutions to banks and bank trust departments of all sizes,” Jud Bergman, chairman and chief executive officer of Envestnet, said in a statement.

He added: “This consolidating acquisition solidifies our presence in the bank channel, and is an important milestone on our path of transforming the wealth management industry and offering advisors and institutions the solutions they need to improve portfolio and practice management. By leveraging our core expertise in large-scale enterprise conversions in the context of a consolidating acquisition, we expect to accelerate our growth and create shareholder value.”

When adding Prudential WMS, Envestnet said it will have $139 billion in turnkey asset management platform assets.

Though the deal is expected to close early in the third quarter, the consolidation may take a year or longer to be completed after that.

"Given the extended planning cycles within the bank channel, the full economic effects of the consolidation may take a year or longer from closing...The combination of WMS and Envestnet will provide clients of WMS with an even stronger technology and wealth management platform,” said Stuart Parker, president of Prudential Investments. “We believe that clients will also benefit from the combined firm’s strong commitment to the bank and wealth management marketplace.”

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