) announced the finalization of the deal to shed Victory Capital
Management and its broker dealer affiliate, Victory Capital
Advisers. The company sealed the agreement with Victory and
Crestview Partners - a private equity firm - for cash and debt.
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KeyCorp anticipates a net after-tax gain from the sale to range
from $100-$115 million. Moreover, the cash portion from the above
mentioned gain is expected to range from $75-$90 million.
Further, KeyCorp has received approval from the Federal Reserve
to utilize the proceeds from the sale of its subsidiary to
repurchase common shares.
Earlier, in Mar 2013, following the approval from the Fed, as
part of the Comprehensive Capital Analysis and Review, the board
of directors of KeyCorp authorized a share repurchase program
worth up to $426 million, to be completed by the end of
Following the closure, Victory Capital has become an independent
company. Moreover, the employees of the firm hold a considerable
percentage of the outstanding equity.
Additionally, Victory Capital CEO David Brown and President
Christopher Ohmacht would retain their existing positions.
Further, Brown and Ohmacht have been named on the board of
Victory Capital along with two representatives from Crestview and
3 independent directors having considerable experience in asset
KeyCorp's decision to vend its subsidiary is part of its strategy
to focus on the core banking operations. Further, this would
enhance investors' confidence in the stock as the company plans
to utilize the cash for capital deployment.
KeyCorp currently carries a Zacks Rank #2 (Buy). Other stocks
that are also worth a look include
Enterprise Financial Services Corp
) with a Zacks Rank #1 (Strong Buy) and
) with a Zacks Rank #2 (Buy).