SunTrust Banks (STI) has agreed to sell RidgeWorth Capital Management, its asset management business, for $245 million.
The buyers are a group of RidgeWorth employees and outside investors led by the private-equity firm Lightyear Capital, the Atlanta-based SunTrust said in a news release Wednesday. The deal could be worth an additional $20 million beyond the $245 million sale price depending on the performance of certain RidgeWorth assets.
RidgeWorth manages about $50.6 billion, and has contributed about $25 million to SunTrust's net income through the first three quarters of 2013, the news release said.
"Lightyear Capital is an experienced partner that will help RidgeWorth build on its success in growing third-party assets, and we look forward to continuing our relationship with RidgeWorth as an independent asset management business," said Mark Chancy, a SunTrust wholesale banking executive, in the news release.
SunTrust expects the deal to close in the second quarter of 2014, pending regulatory approval and the consent of certain RidgeWorth clients.
The $172 billion-asset SunTrust has taken an earnings hit this year as it settled various mortgage-related issues. In October, it agreed to pay about $1.5 billion to settle mortgage claims brought by several government agencies, and said it would pay Freddie Mac $65 million to settle allegations that it had sold the government-sponsored enterprise bad loans.
SunTrust has tried to sell RidgeWorth before. In 2010, it said it was in discussions to sell some of RidgeWorth's assets, but did not close the deal.
Apart from the settlements, SunTrust has sought to cut costs and improve efficiency, and recently announced layoffs in its mortgage unit.