Genworth Financial, Inc
) completed the divestiture of its Wealth Management business to
AqGen Liberty Acquisition, Inc., for $412.5 million.
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Sale proceeds approximated $316 million net of transaction costs
and payments to settle obligations to the former owners of its
Altegris businesses. Genworth intends to deploy the proceeds
along with cash balance to pay down the 2014 debt maturities.
Genworth, in third quarter, expects to record additional
after-tax loss of up to $10 million related to the divestiture.
To better focus on capital generation, increase financial
strength and flexibility of the company as well as simply the
business model, Genworth decided to divest the wealth management
business. The vend-off includes divesting Genworth Financial
Wealth Management, and alternative solutions provider, the
Altegris companies. As a result, it entered into an agreement end
of March with AqGen Liberty Acquisition, Inc., a subsidiary of
AqGen Liberty Holdings LLC, a partnership of Aquiline Capital
Partners and Genstar Capital for the same.
This divestiture also marks its heightened focus on core business
and capital generation from a non-core business. In April last
year, the company divested its tax and accounting financial
advisor unit, Genworth Financial Investment Services (GFIS) to
Cetera Financial Group for about $79 million plus contingent
Genworth Financial Wealth Management will continue to operate
under its current brand name until an appropriate new name is
announced later this year.
Genworth has always remained focused to enhance its operational
results. As such in June this year, Genworth Financial decided to
sever 400 positions, of which 150 are not to be filled. Genworth
will have $80 to $90 million in annual pre-tax expense savings
when the plan is fully implemented.
Genworth, in the last reported quarter, missed the Zacks
Consensus Estimate after three straight quarter surprises.
However, results were much above the year-ago level. Also, the
average beat remains nearly 17%. With sustained focus on
strengthening its portfolio and a drive to enhance operational
results, we expect it to regain the momentum.
Genworth carries Zacks Rank #3 (Hold). Life insurers
China Life Insurance Co. Ltd.
StanCorp Financial Group Inc.
Lincoln National Corporation
) carry favorable Zacks Rank #1 (Strong Buy) and are worth