Truist To Sell 20% Stake In Truist Insurance To Stone Point Capital For $1.95 Bln

(RTTNews) - Truist Financial Corp. (TFC) announced Thursday that it has agreed to sell a 20% stake in its insurance brokerage unit Truist Insurance Holdings, Inc. to funds managed by Stone Point Capital for $1.95 billion.

The transaction represents an aggregate value of $14.75 billion for Truist Insurance, including a common equity value of $9.75 billion and $5.0 billion of inter-company preferred equity issued by Truist Insurance to Truist.

Truist also expects the transaction to be around neutral to net income available to shareholders and earnings per share, with the potential for enhanced growth as the generated capital is deployed over time.

Mubadala Investment Co. and other co-investors are participating in the investment with Stone Point.

The investment is expected to close in the second quarter. Following the deal closure, Truist will own 80% of Truist Insurance, which will continue to be an important contributor for the company.

A five-person Board will be formed to oversee Truist Insurance , comprising four members appointed by Truist and one member appointed by Stone Point.

With the stake sale, the company expects to maintain strategic flexibility and future upside in Truist Insurance, which will continue to benefit from Truist's operations, access to capital, and client relationships.