Community Bank unit to acquire Texas company
The employee-benefits unit of DeWitt-based Community Bank System, Inc. (NYSE: CBU) plans to bolster its staff and expand its business lines with the acquisition of a Texas company.
The Utica-based subsidiary, Benefit Plans Administrative Services, Inc. (BPAS); will close on its purchase of Hand Benefits & Trust, Inc. of Houston sometime in the second quarter of this year. BPAS is an employeebenefits consulting and administration co company with clients throughout the country.
It currently employs 100, and the addition of the 50 employees from Hand Benefits was one of the main reasons for the deal, says Barry Kublin, president of BPAS. Hand Benefits provides employee-benefit-plan administration and trust services.
“have had double-digit growth for nine consecutive years,” Kublin says. “We needed Houston just to support our organic growth here. We have 300 clients just in Puerto Rico.”
BPAS has clients, which include Fortune 500 companies, in 32 states. The firms did not release financial terms of the transaction.
BPAS is retaining all of Hand Benefits’ employees.
Having a presence in the Southern part of the country will help BPAS’ business there, Kublin says. In addition to Utica, the firm has an office in Pittsburgh. Hand Benefits’ Houston office will remain open.
“[Clients] prefer localized consulting services,” he says. “That doesn’t mean you have to be in their backyard, but somebody in Oklahoma would probably prefer to have someone in Texas they can talk to.”
Hand Benefits also brings new two lines of business to BPAS. The firm will now offer flexible-spending accounts and collective-investment-fund services, a type of mutual-fund administration.
In 1939, the late Thomas Hand founded Hand Benefits & Trust, Inc. after working in the pension industry. His son William Hand succeeded him in 1966.
Today, W. David Hand is president and CEO and Stephen Hand is senior vice president.
Neither could be reached for comment on the deal, but in a letter posted on the company’s Web site, David Hand said the company will operate under the same name and that both he and Stephen Hand will continue to lead the firm.
“We are looking forward to being able to provide our customers with more advanced technology and services once our acquisition is complete,” David Hand wrote in the letter. “In addition to their strong capital commitment, BPAS is a leader in product development and will provide us with the tools we need to greatly enhance our 401(k) offering, and defined-benefit plan Web technology.
Community Bank’s employee-benefits administration and consulting operation is its fastest growing financial-services business: It accounts for 60 percent of Community Bank’s total financial-services revenue, according to the bank.
Employee-benefits work generated $13.2 million in revenue at the bank in 2006, compared with $11.2 million in 2005. The acquisition of Hand Benefits will give BPAS annual revenue of more than $20 million.