State Street Boston Corp. said it plans to acquire Princeton Financial Systems, a software developer popular with insurance companies for its portfolio accounting systems.
The bank, which manages $280 billion in assets for institutional investors and keeps an additional $2.7 billion of assets in custody, expects to close the deal by the end of December.
Financial terms were not disclosed, but analysts estimate the purchase price at more than $60 million. Princeton Financial predicts revenues of $20 million this year.
Princeton Financial is owned by William M. Mayhall, president and chief executive; Gerald E. Finsen, chairman and chief technology officer; and a venture capital fund.
The company will become part of State Street's broad base of financial services aimed at institutional investors.
"We're going to be in the software business," said Ronald Logue, executive vice president for mutual fund services at State Street. "We have a growing insurance custody business, and this acquisition will help further that."
Analysts said the firm will help State Street expand its business with the insurance industry.
Princeton Financial's premiere product - Portfolio, Accounting and Management, known as Pam - is used primarily by insurance companies to manage more than $1 trillion in investment assets.
The acquisition could help State Street get more business managing assets for insurance companies, which it now does on a small scale, said John W. Adams, an analyst at Adams, Harkness, a Boston brokerage firm. "There are major opportunities to penetrate this market both in the U.S. and abroad," he said.