Cetera Financial Group has agreed to acquire certain assets from Voya Financial’s broker-dealer unit. The transaction is structured as an asset purchase and does  not entail the purchase of the actual B-D, these sources said.

Cetera, a leading independent broker-dealer (IBD) network, was acquired by Genstar, a leading private equity firm in the financial services industry, for $1.7 billion in 2018. Genstar is the majority owner of Mercer Global Advisors, a fast-growing RIA aggregator, and several other firms in the advisor space. The Voya deal could take Cetera's total asset base to about $300 billion if its 900 reps all agree to move.

Valuations for independent broker-dealers and RIAs are at an all-time high, so the transaction makes sense for Voya. Moreover, there are huge amounts of capital available given the explosion in SPACs (special purpose acquisition companies) in the last year.

Earlier this year, Cetera's debt received an upgrade from Moody's. The combination of surging stock prices and low interest rates has improved the financial strength of leveraged businesses. Genstar borrowed about $1 billion to acquire Cetera.

Genstar reportedly is looking to take advantage of the current climate for financial services companies, according to investment banking sources. One option could involve taking Cetera public by selling an interest in the IBD to a SPAC.

"We have always respected VFA's commitment to their business owners, independent operating model and strong community of financial professionals. We share an unwavering purpose in providing more American investors with sound independent financial guidance," sais Adam Antoniades, Cetera's CEO. "By helping financial professionals grow and by bringing new financial professionals to the network, Cetera continues to empower more financial professionals to deliver an Advice-Centric Experience® to more clients. We meet financial professionals where they are to help them grow the businesses of their dreams and leave the legacy they envision."

According to Financial Advisor’s 2020 survey of IBDs, Voya closed out 2019 with about 1,070 reps and $477 million in revenues. Cetera did not participate in the survey but is believed to have revenues over $1.6 billion.

Cetera has five separate IBDs in its network. Depending on the characteristics of a Voya rep’s business, Cetera is expected to steer them to one of its two IBDs, Cetera Advisors or Cetera Advisor Networks.