KeyCorp (KEY), Ohio’s second-largest bank, agreed to sell its investment-management subsidiary and broker- dealer affiliate to a private-equity fund sponsored by Crestview Partners LLC for $246 million.
The sale includes $201 million in cash and a seller note with an initial face value of $45 million, the Cleveland-based lender said today in a statement. The final value of the note will be determined at the end of this year, according to the statement.
KeyCorp estimates an after-tax gain on the sale of its Victory Capital Management unit of $145 million to $155 million, the bank said. Chief Executive Officer Beth E. Mooney intends to seek regulatory approval to repurchase the bank’s common stock with proceeds from the sale, which is expected to be completed in the third quarter, according to the statement.
“The divestiture is consistent with our strategic focus on businesses that leverage the competitive advantages of our core relationship banking model,” Mooney said in the statement.
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