Banking M&A Digest #25

My weekly summary notes on banking and financial services - 

by Aivars Jurcans

Done! And Done

Nuvei, a Texas-based payments technology firm (previously known as Pivotal Payments), has agreed to acquire SafeCharge in an all cash deal valued at USD 889 million.

Source: Reuters

Morgan Stanley has agreed to acquire a 5.5% stake in Tikehau, a Paris-based asset manager, and committed to invest at least EUR 300 million of fresh equity together with other existing investors. The proceeds from capital increase will be used to boost growth and expansion.

Source: Financial Times

JPMorgan Chase has agreed to purchase InstaMed, a healthcare payments and billing processor, for over USD 500 million. JPMorgan already processes more than USD 6 trillion of payments a day.

Source: Financial Times

HNA, a Chinese conglomerate, has agreed to sell its 74% stake in C-Quadrat, an Austrian asset manager, to a group of investors led by Mr Alexander Shutz, C-Quadrat’s founder and CEO. Financial terms of the transaction were not disclosed.

Source: Financial Times

Goldman Sachs has agreed to acquire United Capital Financial, a California-based wealth manager with USD 25 billion of assets under management and 22,000 clients, in a transaction valued at USD 750 million.

Source: Financial Times

Deals on the Table

Assicurazioni Generali, an Italian insurer, is said to be in early talks to acquire the Central European assets of MetLife located in Poland, Czech Republic, Hungary and Romania. The possible transaction value is estimated at more than EUR 2 billion.

Source: Bloomberg

Raiffeisen, an Austrian lender with below 8% market share in Croatia, might be looking for acquisitions as organic growth alone will not be sufficient to boost its market share, according to Michael Mueller, the CEO of Raiffeisen Bank Croatia.

Source: Reuters

Tesco Bank, a UK lender, is said to be actively looking at options to sell its GBP 3.7 billion mortgage loan portfolio.

Source: Financial Times

Deutsche bank is said to be looking at ways of shedding as much as EUR 50 billion in risk weighted assets, or 14% of its balance sheet. According to some estimates Deutsche is sitting on EUR 25 billion of illiquid and difficult-to-price assets classed as “level 3” by regulators. They represent 53% of the bank’s common equity tier 1.

Source: Financial Times

Punjab National Bank, an Indian lender, is said to be considering taking control over Oriental Bank of Commerce, Andhra Bank and Allahabad Bank, small state-run banks.

Source: Reuters

Helaba and Deka, two German public-sector banks, are said to be exploring potential tie-up and to conduct exploratory talks.

Source: Reuters

Thus Spoke the Markets

Greek lenders – Piraeus, National Bank of Greece, Alpha Bank and Eurobank – collectively hold EUR 85 billion of non-performing exposures, equal to 45% of their loan books and almost 50% of Greece’s GDP forecast for 2019.

Source: Financial Times

Where the Money Goes

Investec, a London-listed asset manager, has closed its online robo-advisory investment service, writing off GBP 20 million in operating losses and software costs. Click and Invest was designed for lower spending customers but tended to be more expensive than rival robo-advice services (those using passive funds).

Source: Financial Times

Thanks, But No Deal

BNP Paribas, a French lender, would not be interested in buying Commerzbank if it was asked to look into it, according to Jean Lemierre, its chairman.

Source: Bloomberg

New Tricks for Old Dogs

Czech units of Erste Bank, UniCredit, Societe Generale and KBC are expected to pay a total of USD 260 million into a new fund proposed by Andrej Babis, the prime minister. The fund will invest in social, infrastructure and digital projects. The fund concept has now replaced the initial idea of having a sectoral tax.

Source: Financial Times

Up-and-Comers

Wealthsimple, a Toronto-based robo-advisor that uses algorithms to automate investment decisions, has raised USD 75 million in a fresh funding round from Allianz X (the digital investment arm of Allianz, a German insurer) and Power Financial. The company claims to have USD 4.5 billion of assets under management and 150,000 clients in Canada, the US and the UK.

Source: cnbc.com

aiBank, the digital bank joint venture between CITIC Bank (79%) and Baidu (30%), is said to be seeking to raise USD 1 billion in a private funding round.

Source: Bloomberg

On the Baltic Shores

The value of TransferWise, an Estonian-founded fintech offering cross-border money transfers, has more than doubled its value since its last fundraising 18 months ago, to USD 3.5 billion. In the year ended on 31 March 2018 TransferWise reported net profit of GBP 6.2 million on revenues of GBP 117 million. Thus it is currently being valued at 22x times of its trailing sales.

Source: Financial Times, Bloomberg

Exciting Numbers

Morgan Stanley, Goldman Sachs and JPMorgan earned 55% of the USD 400 million plus fees generated by US tech IPOs in 2018.

Source: Financial Times

According to the US Federal Reserve, the ebitda/ interest ratio for all companies is 10.0x times, compared with under 7.0x times in 2000.

Source: Financial Times

A Thought Worth Noting

“What you are seeing for the first time since the crisis is the normalisation of credit. You are supposed to lose some money in lending. That’s why you get paid a spread.”

Anton Schutz, Mendon Capital

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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.

Photo by Daria Shevtsova on Unsplash