Banking M&A Digest #93 (24.9.2020)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

Hyperion, a privately owned insurance broker, has agreed to buy A-Plan, its rival, in a GBP 700 million deal. The transaction will create a company that manages GBP 4 billion of insurance premiums a year.

Source: FT

Yandex, Russia’s tech group, has agreed to buy Tinkoff, a Russian online bank, for USD 5.5 billion. The cash-and-share deal is still subject to due diligence and a formal offer. 

Source: FT

CaixaBank, a Spanish lender, has agreed to take over Bankia, its state-controlled peer, in a deal that values the target at about EUR 3.8 billion. The transaction would create a lender with a combined market value of about EUR 16.8 billion and with assets of more than EUR 650 billion. The acquisition is expected to generate about EUR 770 million of cost synergies and annual revenues of about EUR 290 million.

Source: Bloomberg, FT

Schroders, a UK asset manager, has agreed to buy Sandaire, a GBP 2.2 billion London-based family office, for an undisclosed price. Established in 1996, Sandaire now looks after 20 wealthy family groups. 

Source: FT

MetLife, an insurer, has agreed to buy Versant Health, a vision-care benefits group, for USD 1.68 billion from an investor group led by Centerbridge Partners and FFL Partners. Versant has more than 33 million members in the US across its vision care plans.

Source: Reuters

Deutsche Boerse has agreed to buy “a majority stake” in Quantitative Brokers, a fintech that provides execution algorithms and analytics for futures, options and interest rate markets, for an undisclosed sum. The company expects revenues of USD 25 million in 2020.

Source: Reuters

Deals On The Table

UniCredit, an Italian lender, is said to be considering to sell its German leasing business  which provides financing for capital goods such as machinery. The equity value of the business is estimated at around EUR 500 million.

Source: Reuters

UniCredit is said to be prepared to kick off the sale of WealthCap, a business which offers customers investment opportunities in real estate, as early as in October 2020. WealthCap is estimated to have an enterprise value of EUR150 – 200 million.

Source: Reuters

Societe Generale, a French lender, is said to be considering merging its 2 French retail networks. French retail banking accounts for 1/3 of the overall revenue at SocGen, which operates under 2 different brands – Societe Generale (7.3 million clients and 1,749 branches) and Credit du Nord (2.4 million clients and 679 branches). 

Source: Reuters

FWD Group, an Asian insurer backed by billionaire Richard Li, is said to be proceeding with its planned Hong Kong IPO that could raise as much as USD 3 billion. Founded in 2013, FWD has USD 50.9 billion in assets under management and more than 7.5 million customers across the region.

Source: Bloomberg

Bank of East Asia, a Hong Kong lender, is said to have agreed to start a process of selling its life insurance unit to “boost profitability and lift its shares”. BEA could raise about USD 500 million to USD 600 million from a potential transaction.

Source: Bloomberg

Root Insurance, a provider of car insurance through mobile apps, is said to be preparing for an IPO that could value it at around USD 6 billion.

Source: Reuters 

Societe Generale is said to be gearing up to launch a sale of Lyxor, its asset management arm. Lyxor had about EUR 132 billion of assets under management at the end of June 2020 and ranks as Europe’s 3rd largest ETF provider. The business could be valued at about USD 1 billion. 

Source: Reuters

London Stock Exchange is said to have entered exclusive talks to sell Borsa Italiana to Euronext, a French operator, who has teamed up with Cassa Depositi e Prestiti and Intesa Sanpaolo “in order to get Italy’s buy-in”. Offers for Borsa are said to value the Italian exchange up to EUR 4 billion. 

Source: Reuters

LoanDepot, a mortgage lender, is said to be looking to revive its plans for an IPO which were scrapped 5 years ago. The company could be worth USD 12 billion to USD 15 billion.

Source: Reuters

Up-and-Comers

Mirakl, a Paris-based e-commerce startup, has raised USD 300 million in a funding round valuing it at USD 1.5 billion. The company makes software that helps build marketplaces and online stores for customers. 

Source: Bloomberg

Next Insurance, an insurance technology startup, is said to be in talks to raise new capital in a round that values it at about USD 2.25 billion. In the previous funding round in October 2019 Next was valued at more than USD 1 billion. 

Source: Bloomberg

Allica Bank, a newly formed UK lender, has received a GBP 26 million investment from Warwick Capital Partners, a UK investment group, and is expected to complete a larger capital raising of up to GBP 100 million around the end of 2020 or in early 2021.

Source: FT

Change-of-Tack

Deutsche Bank is planning to close 100 branches across Germany reducing the total number of domestic branches to around 400. It says the Covid-19 emergency has triggered a “leap of digitalisation” among retail customers.

Source: FT

Exciting Numbers

McKinsey report points to data showing that VC investment in European fintechs dropped from EUR 5.6 billion in H1 2019 to EUR 3.8 billion in the same period of 2020. McKinsey estimates that the European fintech sector will need EUR 5.7 billion of funding to see it through to H2 2021 when some sort of economic normality might return. 

Source: FT

The European Central Bank has relaxed regulations on eurozone banks, freeing up as much as EUR 73 billion in capital to boost lending. At the end of March 2020 all eurozone lenders had an aggregate leverage ratio of 5.36%; ECB estimates that its latest decision would increase that to 5.66%.

Source: FT

A Thought Worth Noting

“A recurring issue is the [audit] firms are not sceptical enough… I’m not aware any auditor ever got promoted at an accounting firm by saying ‘these people are not to be trusted’.”

Prem Sikka, professor of accounting, University of Sheffield

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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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