SunTrust Banks is to sell the company's asset management subsidiary, RidgeWorth Capital Management, to RidgeWorth employees and an investor group led by a private equity fund managed by Lightyear Capital.
"Lightyear Capital is an experienced partner that will help RidgeWorth build on its success in growing third-party assets, and we look forward to continuing our relationship with RidgeWorth as an independent asset management business," says Mark A Chancy, wholesale banking executive at SunTrust.
SunTrust will continue to offer a wide variety of asset management solutions to help its institutional and individual clients with their investment needs.
The sale is expected to close during the second quarter of 2014. It is subject to various, customary closing conditions including consents of certain RidgeWorth investment advisory clients.
RidgeWorth and its five institutional asset management boutiques collectively manage approximately USD50.6bn in assets.
The sale price consists of up to USD245m to be paid at closing with the potential for up to USD20m in additional proceeds based on retention of certain assets. SunTrust estimates the after-tax gain on the transaction to be USD50m.
Credit Suisse and SunTrust Robinson Humphrey acted as financial advisors, and Sullivan and Cromwell provided legal advice to SunTrust on the transaction.