LONDON (dpa-AFX) - Close Brothers Group Plc (CBG.L), a British financial services provider, said on Thursday that it has agreed to sell its wealth management business, Close Brothers Asset Management or CBAM, to funds managed by Oaktree Capital Management, L.P. for up to 200 million pounds.
The seller aims to retain all upfront cash proceeds from the transaction of around 172 million pounds.
Of 172 million pounds, an upfront cash consideration of around 146 million pounds will be paid by Oaktree to Close Brothers on completion of the transaction. A dividend of approximately 26 million pounds is payable by CBAM to Close Brothers on or before the closure of the deal.
The transaction, to be closed early 2025 calendar year, will strengthen the Close Brothers' capital base and improve its position to navigate the current uncertain environment, the Group said.
The sale also allows the seller to focus its resources on its core lending business, where it continues to see good growth prospects and encouraging customer demand.
Mike Biggs, Close Brothers' Chairman, said: 'The transaction is expected to increase the group's common equity tier 1 capital ratio by approximately 100 basis points, marking significant progress towards the plan we outlined in March 2024 to strengthen our capital base.'
The equity value of up to 200 million pounds, including 28 million pounds of contingent deferred consideration in the form of preference shares, represents a multiple of 27 times CBAM's full-year 2024 operating profit after tax.
As of July 31, the value of the gross assets of CBAM was 192 million pounds. For the full-year 2024, the profit after tax attributable to the assets the subject of the transaction was 7.4 million pounds.
Close Brothers was trading up by 3.22 percent at 544.50 pence per share on the LSE.
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