Bank of Ireland agreed to buy most of Davy Stockbrokers for an enterprise value of €440 million on Thursday, four months after a record Central Bank fine forced the State’s largest stockbroker to put itself up for sale.
The bank said it would also pay for around €125 million of excess cash at completion of the deal, largely comprised of the proceeds from the separately announced sale of Davy’s fund management unit and a shareholding in a Britain-based investment company to third parties.
Davy was fined €4.1 million by the Central Bank in March for breaching market rules and was dropped as a primary dealer in Government bonds amid a public outcry, leading to the closure of its bond desk.
Bank of Ireland said the wealth management, capital markets and associated businesses it is acquiring will continue to trade under the Davy brand and will be led by the management team that has overseen the sales process and “has evolved significantly over recent years”.
Separately, Luxembourg-based fund services group IQ-EQ has agreed to buy the remainder of the firm, Davy Global Fund Management (DGFM).
While a statement on that deal did not give financial details, sources told The Irish Times last week that the unit could fetch more than €70 million.