(HRB - Get Report)
is selling its financial advisors business to
(AMP - Get Report)
for $315 million in cash.
The deal, expected to close in four to six months, is subject to certain adjustments and advisor retention at the time of closing, H&R Block says. It expects the deal to generate cash proceeds of $340 million. H&R Block currently has 900 advisors that oversee 376,000 clients and $30 billion of assets under management. Ameriprise Financial, formerly a unit of
(AXP - Get Report)
, was spun off from its parent company in 2005.
The sale agreement is the latest retrenchment for the Kansas City, Mo.-based tax preparation company as it focuses on its bread and butter business.
Earlier this year, after much fanfare, H&R Block finally sold the servicing business of its subprime mortgage lender, Option One to Wilbur Ross. The company was originally supposed to sell the entire business to Cerberus Capital, but as market conditions worsened in the credit and housing markets, the deal fell through.
"The securities brokerage business increasingly demands size and scale, and [H&R Block Financial Advisors] simply did not have the size to be able to compete at the highest levels in the future," said H&R Block Chairman Richard Breeden. "This transaction will give the HRBFA financial advisors a dynamic parent company with a growing platform so that they can compete effectively and efficiently. At the same time, the transaction will benefit Block shareholders, as we reduce risk in a non-core area and enhance our returns on capital. When this transaction closes, we will have completed the strategic realignment that we promised shareholders, and our efforts will be tightly focused on our tax services business that serves more than 23 million clients."