Lightyear Capital has completed the sale of independent broker-dealer Cetera Financial Group to RCS Capital Corporation for $1.15 billion. The transaction closed on April 29, 2014.
Lightyear Capital LLC, a leading financial services private equity firm, today announced that it has completed the sale of Cetera Financial Group, a leading independent broker-dealer, to RCS Capital Corporation (NYSE: RCAP), an investment firm expressly focused on the retail investor, for a purchase price of $1.15 billion in cash. The transaction closed on April 29, 2014.
Cetera provides wealth management support services to financial advisors, financial institutions, and tax and accounting professionals, through its four independently managed firms: Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Financial Institutions (Cetera Investment Services LLC), and Cetera Financial Specialists LLC. Cetera and its subsidiaries will now become part of RCAP’s retail advice platform, and Valerie Brown, President and Chief Executive Officer of Cetera, and her management team, will continue to operate Cetera’s respective brands as part of the RCAP Capital family of companies.
“We are extremely pleased with the outcome of this investment in Cetera,” said Donald B. Marron, Chairman and Founder of Lightyear. “This transaction is a strong example of Lightyear’s investment approach and practice of collaboration with management, enabling us to transform middle-market financial services companies into market leaders.”
Mark F. Vassallo, Managing Partner of Lightyear said, “We worked closely with Valerie and her team to manage Cetera through its divestiture and growth into a market leader. We are confident that Cetera will continue to maintain its market leadership under RCS Capital.”
“Lightyear brought to Cetera invaluable industry and operational insights drawn from their deep financial services industry expertise, benefitting our firms and the advisors we serve,” said Valerie Brown, President and Chief Executive Officer of Cetera. “Under Lightyear’s ownership, Cetera built out its management team, optimized the platform to help advisors grow their businesses, and developed scale through organic growth and acquisitions, all of which have positioned us for even greater future growth on the RCS platform.”
Simpson Thacher & Bartlett LLP acted as legal advisor to Cetera and Lightyear. Bank of America Merrill Lynch acted as financial advisor to Cetera. RCS Capital, the investment-banking arm of RCAP, and Barclays acted as financial advisors to RCAP. Bank of America Merrill Lynch, Barclays, and Luxor Capital Group provided financing to RCAP. Proskauer Rose LLP acted as legal advisor to RCAP, while Duane Morris LLP acted as counsel to the special committee of the board of directors of RCAP.
About Lightyear Capital LLC
Lightyear Capital is a leading private equity firm making primarily control investments in North America-based, middle-market financial services companies. Based in New York, Lightyear, through its three affiliated private equity funds, has raised over $2.5 billion of capital and has completed investments across the financial services spectrum, including asset management, banks, brokerage, financial technology, insurance, and specialty finance. Lightyear brings unique strengths and discipline to its investment process, as well as operating, transaction, and strategic management experience, along with significant contacts and resources beyond capital. The senior team of professionals averages approximately 30 years of financial services-related experience and includes Chris Casciato, Michael Doppelt, Stewart Gross, Thierry Ho, Donald Marron, Michal Petrzela, and Mark Vassallo. For more information, please visit www.lycap.com.