SunTrust Banks has signed a definitive agreement to divest its asset management subsidiary, RidgeWorth Capital Management, to employees and an investor consortium headed by a private equity fund managed by Lightyear Capital.
The total cost of the transaction is approximately$265m, out of $245m will be paid at the closing of the acquisition, while the potential $20m in additional proceeds will be reimbursed based on retention of certain assets.
Atlanta-based SunTrust said that it expects $50m after-tax gain on the transaction.
SunTrust wholesale banking executive Mark Chancy said that Lightyear Capital is an experienced partner that will help RidgeWorth build on its success in growing third-party assets.
Chancy added that SunTrust will continue to provide various types of asset management services to enable its institutional and individual clients with their investment needs.
Subject to customary closing conditions including consents of certain RidgeWorth investment advisory clients, the deal is anticipated to complete in the second quarter of 2014.
Collectively, RidgeWorth and its five institutional asset management boutiques manage nearly $50.6bn in assets.
Credit Suisse and SunTrust Robinson Humphrey were hired to offer financial advice, while Sullivan and Cromwell offered legal advice to SunTrust on the transaction.