Loring Ward International Ltd., a financial company spun off from the former Winnipeg-based Assante Corp., is selling two remaining business services divisions in California as it focuses on building its wealth management business in the United States.
The Winnipeg-based private company said on the weekend it will sell the operations for US$26.5 million to the senior managers and former owners of the businesses before they were acquired by Loring Ward and its predecessor.
The one business unit will be sold for US$17 million in cash as well as US$5.5 million raised from the planned sale of 572,000 shares of Loring Ward common stock held in escrow.
The second business will fetch about $4 million in cash.
The sales complete a divestiture program that saw Loring Ward sell its Moorad Sports Management business, which represents professional baseball and football athletes, and its Maximum Sports Management Inc. division that represents National Football League players.
In the latest sales, Loring Ward said each buyer will assume all client relationships, employees and operating liabilities of the California businesses, excluding a lawsuit associated with Loring Ward.
“This confirms our commitment to the company’s core business segment in asset management and adviser services “ said Robert Herrmann, CEO of Loring Ward. “We intend to continue building on the momentum we are experiencing in this business and to pursue value creation for our shareholders.”
Separately, Loring Ward reported slightly higher profits and rising revenues in its latest financial quarter.
The company, which reports in U.S. dollars, said it earned a net profit of about US$800,000, or 9¢ a share, for the three months ended Sept. 30. That compared with net profits of about US$700,000, or 8¢ a share, for the 2005 third quarter.
Revenue rose to US$11.4 million from US$10.3 million, an increase of 10.7%.
Loring Ward’s stronger finances were driven by cost controls as well as 32% growth in client assets under management to US$4.3 billion from US$3.3 billion.