KeyCorp Selling Victory Capital Management

On Thursday, regional banker KeyCorp (NYSE: KEY  ) announced that, in order to raise cash to repurchase shares of its common stock (which the company believes to be undervalued), KeyCorp is selling its investment management subsidiary Victory Capital Management and its broker dealer affiliate Victory Capital Advisers (together, "Victory") to private equity buyer Crestview Partners, for $246 million in cash and debt.

Crestview will pay $201 upfront, and sign a "seller note" agreeing to pay KeyCorp a further $45 million at face value.

In a statement, KeyCorp Chief Executive Officer Beth E. Mooney described the move as helping the company to "focus" on its "core relationship banking model." The company also said it expects to record an after-tax gain on the sale of anywhere from $145 million to $155 million. The sale is expected to close in Q3 2013.

At a valuation of 2.2 times sales, KeyCorp is selling Victory at a slight premium to its own shares' 2.16 price-to-sales valuation. Nonetheless, investors are subtracting 0.3% from KeyCorp's share price today, as the stock falls to $9.32.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2270529, ~/Articles/ArticleHandler.aspx, 10/24/2014 6:21:52 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement