Sale will strengthen Truist's balance sheet
and enhances strategic flexibility to invest in core banking
franchise
Positions Truist Insurance Holdings for
continued growth in rapidly evolving insurance brokerage
market
Truist to host investor call at 8 a.m. today, Feb. 20,
2024
CHARLOTTE, N.C., GREENWICH, C.T. and NEW YORK, Feb. 20,
2024 /PRNewswire/ -- Truist Financial Corporation
(NYSE: TFC) today announced that it has reached a definitive
agreement to sell its remaining stake in Truist Insurance Holdings
("TIH"), a subsidiary of Truist and the fifth largest insurance
brokerage in the United States, to
an investor group led by private equity firms Stone Point Capital
("Stone Point") and Clayton,
Dubilier & Rice ("CD&R"). Mubadala Investment Company and
other co-investors are also participating in the investment.
The all-cash transaction values TIH at an implied enterprise
value of $15.5 billion or
approximately 18x TIH's 2023 core EBITDA. The sale of TIH is
expected to increase Truist's Dec. 31,
2023, CET1 capital ratio by 230 basis points and increase
its tangible book value per share by $7.12 or 33%. The sale of TIH and reinvestment of
the $10.1 billion of expected cash
proceeds are estimated to be $0.20
dilutive to 2024 earnings per share, assuming the sale closed at
the beginning of 2024 and the proceeds from the sale were
reinvested in cash yielding 4.5%. Following closing, Truist intends
to evaluate a variety of capital deployment options, including a
potential balance sheet repositioning with a goal of replacing
TIH's earnings. Any future actions would be subject to market
conditions and other factors.
"We are pleased to have reached an agreement to sell TIH as it
will further strengthen our balance sheet, afford us the ability to
maintain our earnings profile, and create significant ongoing
flexibility to invest in our core banking franchise," said Truist
Chairman and Chief Executive Officer Bill
Rogers. "We are incredibly proud of the success we've
achieved together with TIH over the years and are excited to see
how Stone Point and CD&R
continue to build the business in its next chapter of growth."
Stone Point and CD&R offer
deep industry and operational expertise to TIH. With the backing of
supportive financial partners, TIH will be well-positioned to grow
in the rapidly evolving insurance brokerage market. TIH will also
have additional resources to invest in cutting-edge technology and
develop new products and services, offering even greater value to
clients.
"Today's announcement is a testament to our strategy, the value
of our insurance business, and the strength and dedication of our
teammates," said TIH Chairman and CEO John
Howard. "Scale is critical to remain competitive in our
rapidly changing industry, and through this partnership, we will
benefit from Stone Point's and
CD&R's expertise in financial services, proven track records of
transformative value creation, and the significant capital support
from two leading financial sponsors. Together with our capital
partners, we will remain focused on growth and look forward to the
opportunity to strengthen our relationships with our clients and
business partners – more than ever before."
"Truist has built a valuable insurance distribution franchise
and we have enjoyed working with them over the past year as a
minority shareholder in TIH," said Chuck
Davis, CEO of Stone Point. "And now, with our partners at
CD&R and Mubadala, we are thrilled to be pursuing the next
chapter of our partnership with John
Howard, Dave Obenauer, and
the rest of the TIH management team."
"We are excited to work alongside management, Stone Point, and the many dedicated teammates at
TIH to build on the company's leadership positions in the retail
and wholesale insurance brokerage market. As new owners of an
independent TIH, we will be laser focused on clients and colleagues
by enhancing the company's capabilities to better serve clients and
becoming an even more attractive destination for top industry
talent," said CD&R Partner David Winokur. "We are thrilled
about the opportunity to work with our partners to grow TIH as a
standalone entity."
The parties expect to complete the transaction during the second
quarter of 2024, subject to certain regulatory reviews and
approvals and the satisfaction of other customary closing
conditions. Truist's Board of Directors has unanimously approved
the agreement.
Truist Conference Call
Truist will host a conference call to discuss the transaction
today, Feb. 20, 2024, at 8 a.m. ET. The presentation materials, which
include an appendix reconciling non-GAAP disclosures, can be
viewed at https://ir.truist.com under "Events &
Presentations."
Investors can access the live webcast or dial-in as follows:
Live webcast for listeners:
https://app.webinar.net/yQMaJRMOkW0
Dial-in for analysts: 1.877.883.0383; passcode 0675886
Advisors
Morgan Stanley & Co. LLC is serving as lead financial
advisor, with Truist Securities and Goldman Sachs & Co. serving
as co-advisors, and Davis Polk &
Wardwell LLP is serving as legal counsel to Truist.
J.P. Morgan Securities LLC, BofA Securities, Wells Fargo
Securities, Barclays, RBC Capital Markets, Citi, BNP Paribas
Securities Corp, Mizuho, TD Securities, Evercore and UBS Investment
Bank are serving as financial advisors to Stone Point and CD&R.
Simpson Thacher & Bartlett LLP is serving as legal counsel and
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as debt
financing counsel to Stone Point. Debevoise & Plimpton LLP is
serving as legal counsel to CD&R. Skadden, Arps, Slate, Meagher
& Flom LLP is serving as legal counsel to Mubadala Investment
Company.
About Truist
Truist Financial Corporation is a purpose-driven financial
services company committed to inspiring and building better lives
and communities. As a leading U.S. commercial bank, Truist has
leading market share in many of the high-growth markets across the
country. Truist offers a wide range of products and services
through our wholesale and consumer businesses, including consumer
and small business banking, commercial banking, corporate and
investment banking, insurance, wealth management, payments, and
specialized lending businesses. Headquartered in Charlotte,
North Carolina, Truist is a top-10
commercial bank with total assets of $535 billion as
of December 31, 2023. Truist Bank, Member FDIC. Learn more
at Truist.com.
About Truist Insurance Holdings
Truist Insurance Holdings, LLC, the fifth largest insurance
broker in the U.S., is a subsidiary of Truist Financial
Corporation (NYSE: TFC). Headquartered in Charlotte, N.C., Truist Insurance Holdings
operates more than 200 offices through its portfolio of wholesale,
retail and insurance services businesses. To learn more, visit
www.truistinsurance.com.
About Stone Point Capital
Stone Point is an alternative
investment firm based in Greenwich,
CT, with more than $50 billion
of assets under management. Stone
Point targets investments in companies in the global
financial services industry and related sectors. The firm invests
in alternative asset classes, including private equity through its
flagship Trident Funds and credit through commingled funds and
separately managed accounts. In addition, Stone Point Capital
Markets supports our firm, portfolio companies and other clients by
providing dedicated financing solutions. For more information,
please visit www.stonepoint.com.
About Clayton, Dubilier & Rice
Founded in 1978, CD&R is a leading private investment firm
with a strategy of generating strong investment returns by building
more robust and sustainable businesses through the combination of
skilled investment experience and deep operating capabilities. In
partnership with the management teams of its portfolio companies,
CD&R takes a long-term view of value creation and emphasizes
positive stewardship and impact. The firm invests in businesses
that span a broad range of industries, including industrial,
healthcare, consumer, technology and financial services end
markets. CD&R is privately owned by its partners and has
offices in New York and
London. For more information,
please visit www.cdr-inc.com and follow the firm's activities
through LinkedIn and @CDRBuilds on X/Twitter.
About Mubadala Investment Company
Mubadala
Investment Company is a sovereign investor managing a global
portfolio, aimed at generating sustainable financial returns for
the Government of Abu Dhabi. Mubadala's $276 billion portfolio spans six continents with
interests in multiple sectors and asset classes. It leverages its
deep sectoral expertise and long-standing partnerships to drive
sustainable growth and profit, while supporting the continued
diversification and global integration of the economy of the United
Arab Emirates. For more information about Mubadala Investment
Company, please visit: www.mubadala.com.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements can be identified by the fact that they do not
relate strictly to historical or current facts. Forward-looking
statements often use words such as "believe," "expect,"
"anticipate," "intend," "pursue," "seek," "continue," "estimate,"
"project," "outlook," "forecast," "potential," "target,"
"objective," "trend," "plan," "goal," "initiative," "priorities,"
or other words of comparable meaning or future-tense or conditional
verbs such as "may," "will," "should," "would," or "could." In
particular, forward-looking statements by Truist include, but are
not limited to, statements Truist makes about (i) the expected cash
proceeds to be received by Truist in connection with the
transaction, (ii) the anticipated timing for closing the
transaction, (iii) the financial impact of the transaction on
Truist, including to its CET1 ratio, tangible book value per share
and earnings per share, (iv) the use of proceeds from the sale, and
(v) expected advantages of the sale to Truist. Forward-looking
statements convey Truist's expectations, intentions, or forecasts
about future events, circumstances, or results. All forward-looking
statements, by their nature, are subject to assumptions, risks, and
uncertainties, which may change over time and many of which are
beyond Truist's control. You should not rely on any forward-looking
statement as a prediction or guarantee about the future. Actual
future objectives, strategies, plans, prospects, performance,
conditions, and results may differ materially from those set forth
in any forward-looking statement. While no list of assumptions,
risks, and uncertainties could be complete, some of the factors
that may cause actual results or other future events or
circumstances to differ from those in Truist's forward-looking
statements include the risks and uncertainties more fully discussed
in Part I, Item 1A (Risk Factors) in Truist's most recently filed
Annual Report on Form 10-K and in Truist's subsequent filings with
the Securities and Exchange Commission: Any forward-looking
statement made by Truist or on its behalf speaks only as of the
date that it was made. Truist does not undertake to update any
forward-looking statement to reflect the impact of events,
circumstances, or results that arise after the date that the
statement was made, except as required by applicable securities
laws. You, however, should consult further disclosures (including
disclosures of a forward-looking nature) that Truist may make in
any subsequent Annual Report on Form 10-K, Quarterly Report on Form
10-Q, or Current Report on Form 8-K.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/truist-announces-agreement-to-sell-remaining-stake-in-truist-insurance-holdings-to-investor-group-led-by-stone-point-capital-and-clayton-dubilier--rice-valuing-truist-insurance-holdings-at-15-5-billion-302065877.html
SOURCE Truist Financial Corporation