Divestments in action: helping Investec focus on its core strengths

Transaction News April 2014

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In 2013, Investec underwent a review of its global businesses and a decision was made to sell its Professional Finance and Asset Finance divisions in Australia.  In April 2014, Investec announced a definitive agreement with Bank of Queensland to sell its Professional Finance and Asset Finance divisions to Bank of Queensland. 

When Investec needed a transaction adviser to work with them on this project, they contacted EY to work with their advisory team. EY has had a long history working with Investec as its auditor and tax adviser.  On this project, EY worked closely with the Investec management team to assist them in preparing for and executing the sale process. 

Our client

Established in 1974, the Investec Group is an international specialist bank and asset manager providing a diverse range of financial products and services to a niche client base across three principal markets: the United Kingdom, South Africa and Australia. Investec focuses on delivering distinctive and profitable solutions for clients in three core areas of activity – asset management, wealth and investment, and specialist banking.

Listed on the London and Johannesburg stock exchanges, the Group has a combined market capitalisation of approximately AUD $6.4 billion and assets under management of AUD $161.2 billion (as at 31 March 2013).

Capital Agenda

The strategic review that led to the sale of the Professional Finance and Asset Finance divisions was part of Investec’s continuous evaluation of its global portfolio of businesses. Investec is seeking to concentrate its efforts and capital in those businesses that are within its specialist niches where it can demonstrate a distinctive approach.

Roger Brown, Executive Director at EY Transaction Advisory Services comments:

“Our knowledge of Investec, and our specialist banking sector and transaction experience allowed EY to provide timely and valuable insights to Investec throughout the divestment process - from inception through to signing.”

The sale process

EY provided strategic financial, operational and tax advice to Investec throughout the sale process. Our transaction services included:

  • Due diligence on the financial information
  • Analysis of transitional services arrangements
  • Regulatory advice
  • Accounting advice
  • Tax structuring advice

Alan Chonowitz, CFO, Investec comments:

“We have appointed EY as consultants on several occasions and were pleased to include them in this important step in our evolution. At all times we have found the EY teams who have assisted us to be highly committed to the roles they played, demonstrating exceptional service throughout the project."

The outcome

In Bank of Queensland, Investec has found an owner that they are confident will support the Professional Finance and Asset Finance businesses as they pursue their next phase of growth.  Investec remains committed to the Australian market and is in a good position to concentrate on what they do best.