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

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 will be payable from 2025, contingent on “future business model performance.”

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

Founded in 1926, Davy manages in excess of €16bn of client assets and employs over 800 people, including 83 employed by DGFM.

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

For the year ended 31 December 2020, Davy had adjusted profit before tax of €32.8m.

Bank of Ireland said buying Davy “strongly supports the group’s commercial and strategic objectives.”

Francesca McDonagh, CEO of Bank of Ireland, said: “When we look at any acquisition, we consider two key things – if it offers value to our shareholders, and if it is a good fit for our business. Davy scores very highly on both.”

“Wealth management and capital markets are important parts of our business. Bringing Davy into the group represents a significant milestone which will considerably enhance our customer offerings and growth outlook for the group.”

More to follow