NEW YORK--(BUSINESS WIRE)--
Jefferies Financial Group Inc. (NYSE:JEF) announced today that it has
transferred its 50% interest in Berkadia and substantially all of
Leucadia Asset Management (“LAM”) into its Jefferies Group LLC
subsidiary.
Jefferies’ CEO, Rich Handler, and President, Brian Friedman, noted,
“Consolidating our interests in Berkadia and LAM into Jefferies Group
amalgamates all our primary financial services operating businesses into
one platform. Investors will now be able to see the performance of and
value added by our primary financial services businesses in one entity.
The balance of our businesses and investments comprise our Merchant
Banking business, including our interests in National Beef, Spectrum
Brands (formerly HRG), Vitesse, HomeFed and other companies.
“The transfer of Berkadia should increase Jefferies Group’s annuity-like
revenue flow and thereby dampen its earnings volatility. Also, the
approximate $680 million of transferred Berkadia and LAM book value will
be funded with an infusion of approximately $595 million of equity from
Jefferies Financial Group and ultimately $85 million of long term debt
issued by Jefferies Group. While this internal restructuring will be
neutral to the consolidated Jefferies Financial Group, it will be
modestly credit enhancing for Jefferies Group. Post transfer, tangible
leverage(1) for Jefferies Group will drop by about 1 point
from 10.6 times to 9.6 times.”
We will discuss these actions at our Investor Day this Thursday, October
4, as well as further steps we are taking to simplify and add greater
transparency into Jefferies Financial Group.
About Jefferies Financial Group Inc.
Jefferies Financial Group Inc. operates the only independent
full-service global investment banking firm headquartered in the U.S.,
together with an established merchant banking business with a proven
track record. We engage in investment banking, sales and trading and
asset management through Jefferies Group LLC.
|
| |
|
(1)
| | Jefferies Group tangible leverage is a non-GAAP financial measure
defined as tangible assets divided by tangible Jefferies Group
member’s equity. Pro-forma non-GAAP information represents actual
results adjusted for the estimated impact of transactions involving
Berkadia and Leucadia Asset Management, as if they had been
completed May 31, 2018. These transactions include the transfer of
net assets to Jefferies Group and the subsequent investment of an
additional approximate $205 million. The following reconciles the as
reported May 31, 2018 tangible leverage to the pro-forma May 31,
2018 tangible leverage (in billions of dollars except tangible
leverage ratio):
|
|
|
|
As Reported
5/31/18 |
|
|
Pro-forma
Adjustments
|
|
|
Pro-forma
5/31/18 |
|
Total Assets
| | |
$
|
41.1
| | | |
$
|
2.2
| | |
$
|
43.3
| |
Less: Goodwill and Identifiable
Intangible Assets
| | |
| (1.8 |
)
| | |
| - | | |
| (1.8 | ) |
|
Total Tangible Assets
| | | |
39.3
| | | | |
2.2
| | | |
41.5
| |
|
Jefferies Group Member’s Equity
| | | |
5.5
| | | | |
0.6
| | | |
6.1
| |
Less: Goodwill and Identifiable
Intangible Assets
| | |
| (1.8 |
)
| | |
| - | | |
| (1.8 | ) |
Total Tangible Jefferies Group
Member’s Equity
| | | |
3.7
| | | | |
0.6
| | | |
4.3
| |
|
Tangible Leverage Ratio
| | | |
10.6
| | | | | | | |
9.6
| |
View source version on businesswire.com: https://www.businesswire.com/news/home/20181001005985/en/
Jefferies Financial Group Inc.
Laura Ulbrandt, (212) 460-1900
Source: Jefferies Financial Group Inc.