Citigroup to Acquire Irvine-Based Geneva Group for $200 Million
Geneva Group Inc., a broker for sales of small and mid-size companies, agreed Wednesday to be acquired by Citigroup Inc. for a reported $200 million in stock.
Geneva, based in Irvine since its founding as a mergers-and-acquisition firm in 1977, will become a separately operated part of Citigroup’s Salomon Smith Barney, a major provider of services for wealthy individuals.
Having helped thousands of mostly family-owned businesses sell themselves to larger concerns, Geneva now becomes part of a consolidation trend itself, this one in financial services. The deal with the New York financial services giant is expected to close by year-end.
Geneva’s chief executive, David Troob, said the deal will allow his 350 employees to offer clients a huge range of services from Salomon’s private client business the second-largest in the country.
In turn, Salomon will be able to offer those wealthy clients in-house advice on selling their private businesses, a frequent concern for them. Such deals are typically smaller than those handled by Salomon investment bankers.
“These days you have to have strategic interaction among companies,” Troob said in an interview. He said that Citigroup’s chairman, Sanford Weill, has preached that financial companies must take advantage of such synergies.
The deal also underlines how businesses catering to the rich are finding it necessary to offer an expanded range of services.
An unusual recent example was last year’s sale of Leigh Steinberg’s Newport Beach sports agency to Assante Corp., a Canadian money-management firm. The sale was designed to provide clients such as NFL quarterbacks Steve Young and Troy Aikman with post-retirement advice in managing the wealth they acquired as athletes.
Guy Brossy, director of Salomon’s global and corporate investment bank, said Geneva provides a solid new niche. “Most business owners need help looking at liquidity alternatives at some point,” Brossy said, “and now they’ll be able to get that help through Salomon.”
Neither Geneva nor Citigroup disclosed financial terms. Geneva has been owned for nine years by Troob, Chief Operating Officer Robert Kuhn and Loeb Holdings, a New York banking company.
The Daily Deal, an online publication, estimated Citigroup is paying $200 million for Geneva.
Citigroup has 100 million clients in 100 countries. The private client business of its Salomon subsidiary has 11,700 financial consultants managing more than $1 trillion for wealthy individuals.
Since Troob and his partners bought Geneva from Chemical Bank, the staff has grown from about 200 to 350, half of whom work in Irvine. Troob said he and Kuhn will stay on for at least three years as Geneva accelerates its growth through Salomon.
Geneva’s services include seminars to owners of private companies, many of whom will seek counseling years before actually selling their companies, Troob said.
Geneva sells hundreds of companies each year, with most transactions in the $3-million to $100-million range. The vast majority of the sales are arranged for founders of companies, Troob said. Buyers include larger companies in allied businesses and private investment groups.
Bloomberg News was used in compiling this report.