Perpetual will sell its name, along with its prized wealth management business to private equity investor KKR for $2.175 billion and focus on a streamlined asset management function, but the deal has received blowback from shareholders unhappy with a lack of detail.

Perpetual’s corporate trust business will also be part of the KKR deal, with proceeds being used to pay off debt for the group which was worth $771 million as of the end of April and the rest returned to shareholders.

Announced to the ASX after a trading halt on Wednesday morning, the deal is still subject to shareholder approval with a target to be completed by February 2025.

The re-branded Perpetual Asset Management will enter a brand licensing arrangement with KKR for the Perpetual Australian equities teams to continue to use the name for a period of up to seven years. There will be no cost to the asset manager for the first five years of the deal, but “market cost” for the final two years.

Group managing director and CEO, Rob Adams will retire after the transition of the deal, while non-executive director Greg Cooper has been appointed as deputy chair to assist the board with the asset management business and will chair a sub-committee to recruit a CEO.

Cooper is also a non-executive director of CFS, the wealth management business that KKR acquired a 55 per cent stake in from Commonwealth Bank in late 2021.

“Following a comprehensive process, the board has determined that becoming a pure-play global asset management business through a demerger, combined with the separation of the wealth management and corporate trust businesses, will provide superior value for shareholders,” Perpetual said in a statement to the ASX.

Shareholders will be informed of estimated cash proceeds during Perpetual’s FY24 results, which will be posted in August.

The acquisition price represented a valuation of 13.7 times EBITDA (earnings before interest, taxes, depreciation, and amortisation which was $158.3 million) and 16.3 times EBIT (earnings before interest and taxes, which was $133.5 million) based on the last 12 months.

Vote of no confidence