(Reuters) – Truist Financial Corp. is selling a minority stake in its insurance brokerage unit to private equity firm Stone Point Capital LLC in a deal that values the unit at $14.75 billion, it said Thursday.
The move follows a year in which the commercial and investment bank’s profits fell as it set aside a larger proportion for rainy-day funds to manage the chances of its borrowers falling behind on loan payments due to rising inflation and borrowing costs.
Investment firms such as Stone Point have offered some respite in an environment that remains tough for business as firms scale back deals and prioritize cost-cutting.
Stone Point together with Abu Dhabi̵7;s Mubadala Investment Co. and other co-investors will pay $1.95 billion for a 20 percent stake in the entity, Truist Financial said.
Last year, Stone Point also took fitness company Tivity Health private in a $2 billion deal.
Truist Financial said it expects to close the deal in the second quarter of this year, after which it will retain an 80% stake in the entity.
The entity, called Truist Insurance Holdings Inc., offers both retail and wholesale insurance.
Net income for the segment fell nearly 5% to $121 million in the fourth quarter, Truist Financial reported last month.