Genstar to buy majority of Cetera Financial


Genstar Capital has agreed to buy a majority of Aretec Group Inc, holding company of Cetera Financial Group. Financial terms weren’t announced. Cetera, of El Segundo, California, is a network of nearly 8,000 financial advisors. Cetera was seeking bids of $1.5 billion to $2 billion.

PRESS RELEASE

Cetera Financial Group® (“Cetera”), a leading network of nearly 8,000 financial advisors, today announced that it has partnered with Genstar Capital (“Genstar”), to accelerate the company’s growth and success under its current brand, culture and leadership team.  Genstar is a leading private equity firm focused on investments in targeted segments of the financial services, software, industrial technology, and healthcare industries.  The transaction reflects a shared commitment to Cetera’s Advice-Centric Experience™ model and provides access to significant capital for future investments in technology, customer experience, operations, data and growth platforms for the financial advisors and financial institutions served by Cetera.

 

Under this new partnership, Genstar has entered into a definitive agreement with Aretec Group, Inc., the holding company for Cetera, in a transaction expected to close in the late third quarter of this year.  Under the agreement, the specific terms of which were not disclosed, Genstar will assume majority equity control of Cetera, with Cetera’s leadership team maintaining a meaningful ownership position.

 

Genstar’s current and previous financial services investments include Mercer Advisors, AssetMark, Ascensus, Apex Fund Services, Acrisure, ISS, and Strategic Insight.  For this investment Genstar has assembled a strong Board of Directors to help guide the company’s strategic direction. In addition to RJ Moore, CEO of Cetera, Genstar representatives will include Tony Salewski and Sid Ramakrishnan as well as Ben Brigeman, former Executive Vice President for Charles Schwab & Co. who led the company’s Individual Investor (Retail) business; and Hal Strong, formerly Vice Chairman of Russell Investments.

 

The transaction is subject to customary regulatory and other approvals.  The Goldman Sachs & Co. LLC served as Cetera’s financial advisor in this transaction, and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel for the company.  UBS Investment Bank and Deutsche Bank Securities Inc. served as financial advisors to Genstar, and Willkie Farr & Gallagher LLP served as legal counsel for Genstar.

 

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