RHJ International (RHJI) is announcing that it has completed the spin-off of the merchant banking business previously conducted through Ripplewood into a new entity, Kleinwort Benson Advisors LLC (KBA).
As part of this arrangement, RHJI holds a 19% interest in KBA and will retain access to future unique investment products and services for existing and future clients. In consideration for this stake and as a contribution to the costs of winding down the operations of Ripplewood Holdings LLC, which includes the realisation of the Ripplewood Fund’s ("The Fund") remaining portfolio assets, RHJI has contributed a capped cash amount of US$5 million (EURO3.6 million) and some immaterial assets. RHJI will not fund future expenses beyond this.
In order to ensure the continuity of the business previously conducted by Kleinwort Benson Advisors AG, RHJI has licensed the name Kleinwort Benson Advisors LLC to the new entity for a period of seven years. The licence, which has been granted by RHJI’s wholly-owned subsidiary Kleinwort Benson Group Limited ("KBG"), contains customary protections in favour of KBG, including termination rights in certain circumstances.
Tim Collins holds an 81% stake in the new entity, for which he has invested US$20 million (EURO15 million) of new equity to finance KBA’s future operations. These comprise merchant banking and the realisation of the remaining portfolio assets within the The Fund.
RHJI’s existing 13% stake in the general partner of the Fund is not affected by the spin-off. Post spin-off transaction, Ripplewood Holdings LLC will be retained as a subsidiary of RHJI until it is liquidated in conjunction with the ultimate wind-down of The Fund.