Guardian Capital will buy Truist asset-management subsidiary Sterling Capital Management for $70 million in a move aligned to Truist’s ongoing downsizing and cost-cutting initiatives.
The purchase price will also include future earn-out incentives, the firms said, in a deal Sterling Capital CEO Scott Haenni called a “win-win-win” for Sterling Capital, Guardian and Truist.
“We are thrilled for this new chapter for Sterling Capital and the opportunities for growth that this transition provides," Haenni said in a prepared statement. "[The deal] allows Sterling Capital to grow as an independently managed investment management firm poised for continued long-term growth under Guardian's strategic oversight while continuing to partner with Truist on shared relationships and opportunities.”
“We are thankful to have found a like-minded organization in Guardian that shares our culture and values, and we are excited for our future success together,” he said.
Sterling began in 1970 as an independent investment manager, and Truist predecessor BB&T acquired a majority stake in the firm in 2005. The firm has grown to have roughly $76 billion in assets under management and advisement, investing on behalf of institutional and individual investors.
The deal expands Guardian's platform for future growth, George Mavroudis, the Toronto-based firm’s CEO, said in a prepared statement.
“Sterling's pursuit of excellence aligns perfectly with Guardian's commitment to investment quality and innovation. Sterling shares and complements our approach and values in addition to adding new capabilities and investment strategies that enhance our offering in the United States,” Mavroudis said.
Truist is simplifying its business. Stone Point Capital and Clayton Dubilier & Rice are edging closer to a deal to purchase Truist Insurance for roughly $15 billion, Insurance Insider reported last week.
That deal, which has reportedly been in the works for months, would mark a turnaround from Truist’s earlier intention to hold tight onto the bulk of its insurance business. Truist sold a 20% stake in Truist Insurance to Stone Point last February for $1.95 billion.
But it would align with Truist’s other business dealings — specifically, its intention to shave $750 million off the bank’s gross costs by spring 2025. Truist is in the process of shuttering 3.5% of its branch footprint, or 72 branches, by March.
The sale of Sterling to Guardian is expected to close in the second quarter, when Guardian intends to operate Sterling as a stand-alone entity led by its current management team.