CLEVELAND (AP) — KeyCorp plans to sell its investment management subsidiary, Victory Capital Management, to the private equity firm Crestview Partners for $201 million in cash.
The Cleveland-based regional banking company said Thursday the deal also includes a seller note in the initial amount of $45 million, which brings the total price to $246 million.
A seller note is a form of debt financing that lets a company pay for an acquisition with installment payments. KeyCorp said the note's final value will be determined at the end of the year, and it expects an after-tax gain ranging between $145 million to $155 million depending on that. It plans to use proceeds to buy back shares.
Buybacks can help the value of a company's outstanding shares by leaving fewer of them on the market.
Victory Capital Management has about $22 billion in assets under management and serves both institutional and broker clients.
The deal is expected to close in the third quarter.
Shares of KeyCorp fell 8 cents to $9.27 in afternoon trading. The stock is still trading near its 52-week high of $9.64, which it hit Tuesday.