Truist to Sell 20% Stake in $14.75B Insurance Unit to Stone Point

Truist Financial Corp is selling a 20% minority stake in its insurance brokerage unit to private equity firm Stone Point Capital.

Source: Reuters | Published on February 16, 2023

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Truist Financial Corp is selling a minority stake in its insurance brokerage unit to private equity firm Stone Point Capital in a deal that values the unit at $14.75 billion, it said on Thursday.

The move comes after a year in which the commercial and investment bank’s profit fell as it set aside a larger portion of its profits for rainy-day funds to deal with the possibility of its borrowers falling behind on loan payments due to rising inflation and borrowing costs.

Investment firms like Stone Point have provided some relief in an environment where companies are backpedaling on deals and prioritizing cost cuts.

Stone Point, Mubadala Investment Co. of Abu Dhabi, and other co-investors will pay $1.95 billion for a 20% stake in the unit, according to Truist Financial.

Stone Point also took fitness company Tivity Health private in a $2 billion deal last year.

Truist Financial expects the transaction to close in the second quarter of this year, after which it will own 80% of the unit.

Truist Insurance Holdings Inc provides both retail and wholesale insurance.

According to Truist Financial, net income at the segment fell nearly 5% to $121 million in the fourth quarter.