Yahoo Finance BGC Partners (BGCP) Divests Insurance Brokerage Business
Continuing with its efforts of boosting shareholder value, BGC Partners, Inc. BGCP successfully closed the proposed sale of its Insurance Brokerage business to The Ardonagh Group Limited.
Per the terms of the agreement, the entire equity of the entities that comprise BGC Partners’ Insurance Brokerage business has been acquired by Ardonagh, for which, Ardonagh paid $535 million in gross proceeds, subject to the limited post-closing adjustments.
The one-time gain related to the transaction will be reflected in BGC Partners’ consolidated results under U.S. Generally Accepted Accounting Principles (GAAP). However, it will be excluded from the company's results for adjusted earnings.
BGC Partners’ chairman and CEO, Howard W. Lutnick, stated, “We are pleased to have completed the sale of our Insurance Brokerage business to Ardonagh which delivers enormous value for our shareholders. The approximately $535 million in gross proceeds provides us with significant resources to continue repurchasing our shares and/or units and to accelerate Fenics growth."
As per the previous press release, BGC Partners expects to use the proceeds to boost Fenics’ growth and repurchase shares and/or units. While growth of its Insurance Brokerage business was industry-domineering, the scale and scope of the Fenics opportunity is far greater for the firm, with the potential of driving shareholder value significantly higher.
Cantor Fitzgerald & Co. and Bank of America Corporation BAC are serving as financial advisors for the deal.
So far this year, shares of BGC Partners have gained 39.4% compared with 44.7% growth recorded by the industry.
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