Genworth Financial Inc.
) has entered into an agreement to sell its Wealth Management
Business to the joint venture company, Aquiline Capital Partners
and Genstar Capital for approximately $412.5 million. The Wealth
Management Business of Genworth consists of Genworth Financial
Wealth Management and Altegris companies. Altegris is an
alternative solutions provider.
Subject to regulatory approvals and other closing conditions,
the deal is expected to culminate in the second half of 2013.
Genworth expects to incur a loss of $40 million from the
divestiture with $35 million incurring in the first quarter of
2013 and the remaining upon closing of the deal. The company will
use the proceeds from the transaction and net of transaction
related expenses to repay the debt scheduled to mature in
The company has been working toward its goal to strengthen its
business through increased financial flexibility and generating
capital by divesting its non-core businesses. Through the sale of
its Wealth Management Business, Genworth is trying to move
towards achieving this goal. Sustained lower margins in the
Wealth Management segment over the past few years also led
Genworth to hive this business.
Genworth had earlier sought to fortify its core asset
management business within the Wealth Management segment.
Towards this end, in Apr 2012, the company divested Genworth
Financial Investment Services ("GFIS"), its tax and accounting
financial advisor unit. The divestiture was made to Cetera
Financial Group for an undisclosed amount.
Among other insurers engaging in divesting activities,
The Hartford Financial Services Group Inc.
) closed three previously announced divestitures in Jan 2013. The
company has completed the sale of its Retirement Plans business
to Massachusetts Mutual Life Insurance Company, Individual Life
Insurance business to
Prudential Financial Inc.
) and Individual Annuity new business facilities to Forethought
Financial Group Inc. The deal is expected to enhance the
financial flexibility of the company.
Genworth currently carries a Zacks Rank #3 (Hold). Among
others from the industry,
Lincoln National Corp.
) carries a favorable Zacks Rank #2 (Buy) and is worth noting.
GENWORTH FINL (GNW): Free Stock Analysis
HARTFORD FIN SV (HIG): Free Stock Analysis
LINCOLN NATL-IN (LNC): Free Stock Analysis
PRUDENTIAL FINL (PRU): Free Stock Analysis
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