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Barclays Sells iShares Business for $4.4 Billion

By James J. Green

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Barclays PLC announced April 9 that it had agreed to sell its Barclays Global Investors’ iShares ETF business to a new limited partnership formed by private equity firm CVC Capital Partners Group in a deal valued at $4.4 billion.

BGI’s iShares is the largest ETF provider both in the number of products, 369 ETFs, and assets of $296.8 billion, giving it a 46.8% market share, far ahead of the second largest ETF provider, State Street Global, which has 102 ETFs and $103.5 billion in assets for a 16.3% market share.

Barclays said the deal will “enhance its capital position,” realizing a $2.2 billion net gain from the transaction, The $4.4 billion pricetag represents a 10.1X multiple of iShares 2008 EBITDA, Barclay’s said.

Barclays also said it is providing about $3.1 billion in debt financing for the deal, and that it will continue to hold no less than 51% of the total financing for the first five years.

Founded in 1982, CVC Capital Partners is a Luxembourg-based private equity firm that owns 52 companies in a broad range of industries around the world.