Bank of Ireland said today it has completed its €427m deal for J&E Davy Stockbrokers, which was first announced last July.
Bank of Ireland said the deal significantly enhances its commercial and strategic objectives.
Davy had assets under management of about €20 billion at the end of 2021 and Bank of Ireland said combining its existing Wealth & Insurance assets under management of about €22.5 billion provides it with significant scale and breadth of proposition.
It also said the acquisition of Davy enhances the combined services available to its corporate clients and provides further opportunities for growth.
“Along with the KBC Bank Ireland portfolios transaction, which recently received Competition and Consumer Protection Commission approval, completion of this acquisition demonstrates further strategic progress by the group,” Bank of Ireland stated.
Under the terms of the deal, Davy was bought for a final consideration of about €427m after adjusting for the capital position of Davy as of June 2022.
25% of the enterprise value will be paid two years after completion, subject to Davy shareholders meeting a number of agreed criteria.
Bank of Ireland will also pay for excess cash which amounts to about €126m, following the sale earlier this year of Davy Global Fund Management and Davy’s shareholding in Rize ETF.
A further payment of up to €40m will be payable from 2025, contingent on future business model performance, the bank added.
Davy put itself up for sale last year after it was fined €4.13m by the Central Bank in March for breaching market rules. It was the biggest fine of its kind ever levied on a broker in Ireland.
Davy was also dropped as a primary dealer in Irish Government bonds, leading to the closure of its bond desk after news of the breaches.
Francesca McDonagh, group chief executive of Bank of Ireland, said the group was delighted to complete this “important strategic acquisition”.
“As the unrivalled Irish leader in wealth management and capital markets, we are ambitious for the future of Davy within the group. The completion of the deal today represents a fantastic addition to our franchise and business model,” Ms McDonagh said.
“Clients from both organisations will benefit over time from enhanced product and service offerings from our businesses, two organisations with long histories of supporting clients across the personal, business and corporate landscape in Ireland,” she added.
“We really welcome the completion of the transaction and look forward to providing the world-class services that our clients expect while continuing to grow the Davy business from within the Bank of Ireland Group,” said Bernard Byrne, chief executive of Davy.
“This is an exciting milestone for both organisations and an opportunity for us to materially enhance the support we can give our clients with their growth plans and ambitions. We are confident for the future as we work with the bank on the next phase of our journey,” he added.