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Davy sold to Bank of Ireland in £377m deal


(Stock Image)

(Stock Image)

Northern Ireland property developer Paddy Kearney

Northern Ireland property developer Paddy Kearney


(Stock Image)

Bank of Ireland is purchasing stockbroker Davy’s wealth management and capital markets business for a total enterprise value of €440m (£377m). 

The deal includes a major operation in Northern Ireland, where the Irish business is the appointed investment manager for a £300m courts fund.

A quarter of the enterprise value will be paid two years after completion of the deal subject to Davy shareholders meeting “a number of agreed criteria”, according to a statement from the bank.

The balance will be paid as cash consideration on completion of the transaction, which is expected next year.

In addition, further payments of up to €40m (£34m) will be payable from 2025, contingent on “future business model performance”.

Davy has separately announced that it is selling Davy Global Fund Management (DGFM) to investment group IQ-EQ.

Founded in 1926, Davy manages in excess of €16bn (£14bn) of client assets and employs more than 800 people, including 83 employed by DGFM.

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The company has offices in Dublin, Cork, Galway, Belfast, and London, providing wealth management, capital markets advisory services, and DGFM services to its clients.

It put itself up for sale earlier this year after a €4.1m (£3.5m) Central Bank of Ireland fine over a 2014 bond deal for client Paddy Kearney, a Northern Ireland property developer.

The fine had raised questions over the continued presence in the firm of some of the executives who had been involved in the bond deal and allegedly benefited without Mr Kearney’s knowledge.

Mr Kearney is now bringing separate legal action against Davy and the executives in the Republic.

The Department of Justice in Northern Ireland has said it expects management of the £300m court fund to transfer with the sale of stockbroking firm Davy.

Davy Private Clients is the appointed investment manager which provides investment services for the Courts Fund Office, within the NI Courts and Tribunals Service.

It administers funds, such as compensation, held in court on behalf of minors and individuals who cannot manage their own affairs because of mental incapacity.

According to a statement of accounts presented earlier this year, the Court Funds Office held nearly £300m in court at the end of March 2020.

Davy was appointed investment manager in 2018 for five years, with the option to then extend the term for another five years.

The Department of Justice said earlier this week: “The potential sale of J&E Davy shares is a matter for the owners and therefore it is inappropriate for DoJ to comment on that matter.

“As things stand, it is our understanding that the services provided to the Court Funds Office by Davy UK will remain unchanged should there be any change of ownership.

"There is nothing at this stage to indicate otherwise.”

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