Truist Financial to sell remaining stake in TIH at $15.5B valuation

Truist Financial announced that it has reached a definitive agreement to sell its remaining stake in Truist Insurance Holdings, or TIH, a subsidiary of Truist and the fifth largest insurance brokerage in the United States, to an investor group led by private equity firms Stone Point Capital and Clayton, Dubilier & Rice, or CD&R. Mubadala Investment Company and other co-investors are also participating in the investment. The all-cash transaction values TIH at an implied enterprise value of $15.5B or approximately 18x TIH’s 2023 core EBITDA. The sale of TIH is expected to increase Truist’s December 31, 2023, CET1 capital ratio by 230 basis points and increase its tangible book value per share by $7.12 or 33%. The sale of TIH and reinvestment of the $10.1B of expected cash proceeds are estimated to be $0.20 dilutive to 2024 earnings per share, assuming the sale closed at the beginning of 2024 and the proceeds from the sale were reinvested in cash yielding 4.5%. Following closing, Truist intends to evaluate a variety of capital deployment options, including a potential balance sheet repositioning with a goal of replacing TIH’s earnings. Any future actions would be subject to market conditions and other factors. The parties expect to complete the transaction during the second quarter of 2024, subject to certain regulatory reviews and approvals and the satisfaction of other customary closing conditions. Truist’s board of directors has unanimously approved the agreement.