Corporate Financier’s Notes
by Aivars Jurcans
Done! And Done
A global group of investors led by Stone Point Capital and Further Global, has agreed to acquire Duff & Phelps, a New York-based financial services firm, from Permira Funds for USD 4.2 billion. Duff & Phelps advises clients on valuations, corporate finance, compliance and regulatory matters.
Amundi, a French fund management group with over EUR 1.5 trillion of assets under management, agreed to buy Sabadell Asset Management (with EUR 23 billion in assets under management), the asset management arm of a Spanish bank, for EUR 430 million in cash.
Clearstream, Deutsche Boerse’s post-trade service provider, has agreed to acquire a 51% stake in Fondcenter, a fund distribution company, from UBS, a Swiss bank, for around USD 400 million.
Access Bank, Nigeria’s biggest lender by assets (USD 16 billion), has acquired Transnational Bank, Kenya’s lender with 28 outlets across the country. The terms of the transaction were not disclosed.
Deals On The Table
Warburg Pincus, a private equity firm, is said to be considering a possible bid for Quilter, a London-based wealth manager with a market value of about GBP 3.2 billion. Adjusting for the sale of Reassure Group (GBP 425 million), Quilter’s assets under management and administration rose 11% in 2019 to GBP 109.8 billion.
Eurazeo, a European buyout fund, is said to be preparing for a sale of Planet, an Ireland-based payments business that serves more than 400,000 merchants and 100 partner banks, in a deal that could value it at up to EUR 2 billion. This would translate into a multiple of 15x to 20x times its core earnings. Adyen, a competitor, trades at 56x times its expected core earnings, while other competitors, e.g., Wordline and Nexi, are trading at roughly 18.5 times their expected core earnings.
First Abu Dhabi Bank, United Arab Emirates’ largest lender, is said to be in talks to potentially acquire the Egyptian subsidiary of Lebanon’s Bank Audi. Bank Audi Egypt had 50 branches and total assets of USD 4.4 billion at the end of September 2019.
OTP, a Hungarian lender with operations in 12 European countries, is said to be in talks to buy Garanti BBVA’s Romanian unit. Garanti is Romania’s 10th biggest bank by assets.
Intrum, Europe’s debt recovery firm, is said to be considering to buy Cerved Credit Management, the bad loan arm of Italy’s Cerved. The unit has been given a ballpark valuation of around EUR 400 million.
Metrics To Watch
Amundi’s, a French asset manager, operating costs were 10bps of its assets under management at the end of 2018. In comparison, it was 32bps for Schroders, a competitor.
UBS’s, a Swiss bank, shares are trading at 0.8x times its tangible book value, 1/2 of its peak level in 2018. Its return on core capital of 12.4% and a cost to income ratio of 80.5% have failed to reach its goals of 15% and 77%.
BNP, a French bank, has a cost to income ratio of 70%, while Credit Agricole’s, another French bank, sits at 60%. BNP’s shares are traded at 0.72x times tangible book value, while Credit Agricole’s – at roughly 0.95x times.
Follow The Money
MSCI, an indices and data analytics provider, has agreed to acquire “a minority stake” in Burgiss Group, a specialist private asset data provider, for USD 190 million. Burgiss offers performance data covering close to 10,000 private investment vehicles that hold around USD 7 trillion in private equity, private real estate, private debt, infrastructure and natural resource funds.
Monese, a UK challenger fintech that offers current accounts to people who are underserved by mainstream banks, is said to be in talks to raise GBP 100 million in a deal that could value it above GBP 1 billion. In 2018 (the most recent year for which financial data are available) Monese reported revenues of GBP 5.5 million.
Ant Financial, a payment affiliate of Alibaba, has a private valuation of USD 150 billion from its last fundraising round. It is estimated that after listing, based on an industry multiple of 22x times expected earnings, its value could be as high as USD 320 billion in the next 3 years. PayPal, its US rival, trades on 34x times forward earnings.
The USD 3.3 trillion hedge fund industry delivered an overall return of 10.4% in 2019, according to data from HFR.
The UN estimates that achieving its sustainable development goals for issues including poverty, clean water and gender equality by 2030 will require as much as USD 7 trillion a year, with an annual funding shortfall of USD 2.5 trillion in developing countries.
A Thought Worth Noting
“It looks like Basel IV will be the biggest non-event in the history of capital regulation.”
John Cronin, banks analyst, Goodbody
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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.