Banking M&A Digest #69 (9.4.2020)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

Social Finance, an online student lender, has agreed to buy Galileo Financial Technologies, a startup that creates applications for card issuers and payment platforms, for USD 1.2 billion in cash and stock.  Galileo builds “bank in a box” technology that powers the checking account services at digital banks including Chime and Monzo Bank.

Source: Bloomberg, Reuters

Deals On The Table

PrimeCredit, a Hong Kong consumer credit company, is said to be exploring a sale of the business. Established in 1977, it focuses on the origination of personal loans and credit cards. PrimeCredit could be aiming for a valuation of USD 500 million to USD 1 billion.

Source: Bloomberg

Chengfang Huida, a People’s Bank of China-controlled vehicle, is said to buy USD 21 billion of assets from Bank of Jinzhou for less than 1/3 of their reported value. Chengfang Huida will also take a nearly 38% stake in Bank of Jinzhou after spending about USD 1.7 billion to buy the new shares.

Source: WSJ

Follow The Money

Goldman Sachs is said to be buying 2 Gulfstream corporate jets for the use of its chief executive and other top bankers. The bank expects that the aircraft would “help meet the group’s goal of saving USD 1.3 billion over the next  3years”.

Source: FT

Up-and-Comers

Lunar, a Nordic challenger bank with over 130,000 users in Denmark, Sweden and Norway, has extended its Series B funding round by EUR 20 million, bringing the total to EUR 46 million.

Source: FT

Uncharted Territory

AXA, a French insurer, has said it will redeem EUR 1.3 billion of its contingent convertible (“CoCo”) bonds to provide some reassurance to investors. CoCo bonds are perpetual in nature and are the riskiest form of debt that financial firms can issue.

Source: Reuters

Credit Suisse, a Swiss lender, is said to have set up a new investment banking advisory group to counsel clients on the issue of sustainability. 

Source: Reuters

Exciting Numbers

The buyout deal of Thyssenkrupp’s elevator unit marked the highest leverage in European buyout history at 7x times earnings before interest, tax, depreciation and amortisation (ebitda). That is several times the level once thought sensible in European public markets, at around 1.0x to 1.5x times ebitda.

Source: FT

In the US about 2/3 of non-financial corporate bonds are currently rated “junk” or triple B, the lowest rung of the investment-grade spectrum.

Source: FT

A Thought Worth Noting

“This is a crisis like no other. Never in the history of the IMF we have witnessed the world economy coming to a standstill. It is way worse than the global financial crisis.”

Kristalina Georgieva, managing director, International Monetary Fund

 

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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.

Design by Artis Briedis, Photo by Joe Taylor on Unsplash

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