Truist has announced that it has completed its previously announced sale of a 20% stake in Truist Insurance Holdings, Inc., a subsidiary of Truist and the sixth-largest insurance brokerage in the US, to funds managed by Stone Point Capital, a private equity firm focused on the global financial services industry, for $1.95 billion.
Truist, which announced the sale in February, said the transaction represented an aggregate value of $14.75 billion for Truist Insurance Holdings. The aggregate value included a common equity value of $9.75 billion and $5 billion of inter-company preferred equity issued by Truist Insurance Holdings to Truist.
Mubadala Investment Company, as well as other co-investors participated in the investment with Stone Point.
Truist will continue to maintain strategic flexibility and future upside in Truist Insurance Holdings through its 80% majority ownership stake, the company said. Truist Insurance Holdings will continue to benefit from Truist’s operations, access to capital, and client relationships.
Both Truist Insurance Holdings and Truist will benefit from Stone Point’s role as a strong capital partner expected to enable future opportunities for expansion and growth.
Truist Insurance Holdings, which is the seventh-largest insurance broker in the world, will continue to be headed by Chairman and CEO John Howard. It will be overseen by a five-person board, with four members appointed by Truist and one member appointed by Stone Point.
The transaction increases Truist’s Common Equity Tier 1 ratio by nearly 30 basis points and continues to expect the transaction to be relatively neutral to earnings per share, the company noted.
“We look forward to continuing our longstanding relationship with Stone Point to grow our insurance business and further deepen our partnerships with clients and the communities we serve, while also preserving significant strategic and financial flexibility in the business,” said Truist Chairman and CEO Bill Rogers.
“Stone Point’s investment creates more capacity for our business to grow while bolstering our competitive position as our industry continues to consolidate. Consequently, I view this partnership as the best of both worlds – maintaining our strong relationship with Truist while also gaining an experienced partner in Stone Point,” Howard noted.
