"Profit Margin," WSJ: State Street to Buy Brown Brothers Harriman Investor Services for $3.5 Billion.

State Street Corp. has agreed to purchase the investor-services unit of Brown Brothers Harriman & Co., a move that advances its position in the money-management industry above Bank of New York Mellon Corp. In recent history, State Street has struggled to increase revenue in the asset-servicing portion of its business due to pressure from its current clients to lower costs and reduce the fees they pay for tracking their assets. With this purchase, State Streets projects a future rise in its per-share earnings and increases its pre-tax profit margin, along with its goal to cut expenses.

It seems as though the use of the term profit margin in the article is correct. Having spent the past two days reviewing the information in Module 2 concerning financial ratios and more specifically, how we calculate profit margins, I understand that this acquisition will come along with many goodwill assets, which will grow in new revenue. This goodwill may likely include a new, built-in client base and potentially a ton of data that will save State Street money in its administrative and other operating costs in not compiling that data on its own nor working to grow its client base. They're forecasting an increase in their revenue from fees and a potential decrease in their operating expenses, and a hope that this acquisition will realize gains and see an increase in their investment income.

Reference:

Baer, J., & Sebastian, D. (2021, September 7). State Street to Buy Brown Brothers Harriman Investor Services for $3.5 Billion. The Wall Street Journal. https://www.wsj.com/articles/state-street-to-buy-brown-brothers-harriman-investor-services-for-3-5-billion-11631021246?mod=searchresults_pos1&page=1.