On November 3, ING said it had agreed to sell three of its U.S. broker/dealers that comprise the ING Advisors Network to Lightyear Capital LLC, a private equity firm, for an undisclosed price. ING said the sale of the three B/Ds–Financial Network Investment Corp., Multi-Financial Securities Corp., and PrimeVest Financial Services, along with ING Brokers Network LLC, the back-office provider for the B/Ds–would not have a material impact on ING’s earnings.
Jeff Joseph, CEO of Prescient Advisors, said this was “a smart time to roll up broker/dealers,” noting that “valuations are down significantly from three years ago.” Joseph, who writes the Venture Populist column in Investment Advisor, said that Donald Marron, the former PaineWebber CEO who leads Lightyear, “certainly knows the space,” pointed out that Lightyear already has “financial services product and operations expertise,” and said the acquisition constitutes “good synergy” with some of Lightyear’s other portfolio holdings.
In the most recent IA broker/dealer survey, the three B/Ds reported a total of 4,945 registered reps as of April 1, 2009, and total 2008 revenue of $743 million.
ING’s parent company has been under financial stress, instituting wide-ranging cost-cutting initiatives, and has said it will eventually sell its ING Direct USA unit. Pressured by European Commission antitrust regulators, it also agreed in late October to divest its insurance operations, and to pay back half of the 10 billion euros in aid it had received from the Dutch government.