Bank of Ireland has agreed to buy Irish wealth management and capital markets services provider J&E Davy for an enterprise value of €440m (£378m, €519m).
A quarter (25%) of the sum will be paid two years after completion subject to Davy shareholders meeting a number of agreed criteria.
The balance will be paid as cash consideration on completion, which is expected in 2022. In addition, further payments of up to €40m will be payable from 2025, contingent on future business model performance.
Founded in 1926, Davy manages in excess of €16bn of client assets and employs over 800 people. The company has offices in Dublin, Cork, Galway, Belfast, and London, providing wealth management, capital markets advisory services, and fund management services to its clients.
Separate deals
Davy has separately announced it is selling Davy Global Fund Management (DGFM) to IQ-EQ and its 63% shareholding in Rize ETF to Martin Gilbert-backed Asset Co.
As a result, Davy is “expected to have a significant excess cash position at completion over and above that which is required to run the business”, it said in a statement on 22 June.
Bank of Ireland will also pay for the excess cash, due to be finalised at completion, which will be largely comprised of the proceeds from these disposals, currently estimated to be €125m.
Enhance customer offerings
Francesca McDonagh, group chief executive of Bank of Ireland, said: “When we look at any acquisition, we consider two key things – if it offers value to our shareholders, and if it is a good fit for our business. Davy scores very highly on both.
“Wealth management and capital markets are important parts of our business. Bringing Davy into the group represents a significant milestone which will considerably enhance our customer offerings and growth outlook for the group.
“It is our ambition to build on Davy’s unrivalled leadership position in these businesses, while also enabling it to benefit from a range of comprehensive culture, risk and governance programmes that we have successfully introduced in recent years.
“Accordingly, we see a continuation of the Davy brand and structure, under the Bank of Ireland umbrella.”
The completion of the acquisition is subject to customary conditions including approval by the Central Bank of Ireland and the Competition and Consumer Protection Commission.
