Banking M&A Digest #60 (6.2.2020)

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Corporate Financier’s Notes  

by Aivars Jurcans

Done! And Done

Perpetual, an Australian asset manager, has agreed to buy Trillium Asset Management, a sustainable-investment firm, for USD 36 million. Trillium was founded in 1982 and has more than USD 3 billion in assets.

Source: Bloomberg

Pacific Premier Bancorp, a Southern California-based regional business bank, has agreed to acquire Opus Bank, another California bank based in Irvine, in an all-stock deal valued at USD 1 billion. The deal is expected to increase Pacific Premier’s assets by USD 8 billion – to USD 20 billion.

Source: Reuters

Worldline, a French payment services company, has agreed to acquire Ingenico, its rival, for EUR 7.8 billion in cash (EUR 2 billion) and shares. The deal is expected to create the world’s 4th largest payment services provider with combined revenues of EUR 5.3 billion in 2019, servicing almost 1 million merchants. Worldline’s takeover premium (25%) has pushed the valuation to 14x times ebitda. 

Source: FT

Banca Transilvania, a Romanian lender, has agreed to acquire 100% of shares in Microinvest, a leading micro-finance company in Moldova. The terms of the deal were not disclosed. Transilvania is already a shareholder in Victoria Bank, Moldova’s 3rd largest local lender.

Source: KPMG

GIC, Singapore’s sovereign wealth firm, and Norways’s Norfund have agreed to buy about 30% of shares in Yoma Bank, a Myanmar lender founded by Serge Pun (a local tycoon) in 1993, for USD 88.7 million.

Source: Bloomberg

Deals On The Table

The Indian government is said to be considering selling its 47% stake in IDBI Bank and an initial public offering of “part of its holding” in Life Insurance Corporation of India. The government’s stake in IDBI Bank is valued at about USD 25 billion, while LIC holds about USD 433 billion in assets, more than the whole of India’s mutual fund industry combined.

Source: Bloomberg

JSK, a Brazilian logistics operator, is said to be preparing to float shares in Vamos, its subsidiary specialising in truck and equipment leasing.

Source: Reuters

Banco Daycoval, a Brazilian lender, is said to be considering an IPO to re-list its shares on the Sao Paulo stock exchange. The offering is expected to raise close to USD 1 billion. 

Source: Reuters

SIA, a state-controlled Italian payments company, is said to be considering a Milan stock exchange listing as one of strategic options. A year ago the company estimated that an IPO could value it at EUR 3.5 billion.

Source: Reuters

Top executives at EQT Credit, a direct lending and distressed debt arm of EQT (a Nordic PE firm), are said to be considering an MBO of the business. EQT Credit had EUR 3.9 billion of assets under management at the end of 2019 and contributes about 6% of the firm’s revenue. 

Source: Bloomberg

Thanks, But No Deal

Cerberus Capital Management, a New York-based hedge fund, has missed a critical deadline to bid for Altico Capital India, a shadow lender.  SSG Capital Management thus remains the only external bidder for the company.

Source: Bloomberg

Metrics To Watch

Danske Bank, a Danish lender, is targeting a return on equity of 9-10% in 2023, or about the same level as today; the ROE is expected to fall to 5-6% in 2020, pretty much in line with other European banks.

Source: FT

BNP Paribas, a French bank, anticipates a return on tangible equity of 10% in 2020, down from a previous target of 10.5% and compared with 9.8% in 2019.

Source: FT

Allied Irish Bank’s, an Irish lender which is still 70% owned by the government, shares trade at a price-to-book ratio of 0.5x, below the 0.7x average for European banks. 

Source: FT

Julius Baer’s, a Swiss bank, cost-to-income ratio remained stable in 2019 at 71% (the target is to push it below 67% by 2022), while gross margins continued to slide down to 82bps from 86bps. The bank’s shares are currently trading at 11.5x times next year’s earnings. It expects to increase the adjusted return on CET1 capital to more than 30% from 27% now.

Source: FT

Deutsche Bank’s common tier one equity ratio was 13.6% of risk-weighted assets at the end of Q4 2019. Analysts had expected this ratio to fall to 13.2%.

Source: FT

Goldman Sachs aims to achieve a 14% return on tangible equity by 2022, compared to its latest return of 10.6%.

Source: FT

Follow The Money

Barclays Bank, a UK lender, has provided more than USD 85 billion of finance to fossil fuel companies and carbon projects since the Paris agreement was signed in 2015, according to ShareAction. This makes it the world’s 6th largest backer of fossil fuels, and constitutes the highest level of fossil fuel financing of any European bank, exceeding its peers by USD 27 billion.

Source: FT

Aon, a London-based insurance brokerage and advisory firm, has bought Cytelligence, a Canadian firm with cybersecurity consulting and digital forensic expertise, “seeking to expand its foothold in the market of helping companies to deal with cyber attacks”.

Source: Bloomberg

Barclays has taken “a strategic minority stake” in Flux, a UK digital receipts startup. Established in 2016, Flux has delivered more than 1 million receipts across the UK.

Source: Finextra

Commonwealth Bank of Australia has made a USD 200 million follow-up investment in Klarna, a Swedish fintech, to support Klarna’s launch in Australia. CBA’s shareholding has increased from 1.8% to 5.5% post investment.

Source: Finextra

Daiwa Securities Group is to invest USD 128 million in Katana, a marketing company established in 2017, “to diversify revenue sources”.

Source: Reuters

Exciting Numbers

Morgan Stanley and Oliver Wyman estimate that, by 2023, “private capital funds” (of which private equity is the biggest slice) will account for a 1/5 of all investment industry revenues, up from 14% in 2018.

Source: FT

Cyber attacks are expected to cost the world USD 6 trillion annually by 2021, according to a 2019 report from Cisco Security and Cybersecurity.

Source: Bloomberg

More than 11 billion paper receipts are printed each year in the UK alone, and most can’t be recycled.

Source: FT

A Thought Worth Noting

“Receipts – because of how they are itemised – make up the entire history of our life’s purchases. There’s so much data there. And 90% of it is wasted, because paper receipts end up being lost, thrown away, or become too faded to use.”

Veronique Barbosa, chief operating officer, Flux

 

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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 Joe Taylor on Unsplash

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