Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
INX, a global trading platform, has agreed to acquire Openfinance Securities, a Chicago based broker-dealer. The terms of the deal were not disclosed, but current valuations put Openfinance at a range of USD 40 million to USD 70 million.
Brookfield Business Partners, a real estate services provider, has agreed to buy the remaining 43% stake it does not hold in Genworth MI Canada, a mortgage insurer, for about USD 1.21 billion.
Syncapay, a US payment firm, has bought the North American unit of Wirecard, the insolvent German payments company. The deal was backed by Centerbridge Partners, a private investment management firm. The financial details of the deal were not disclosed.
Sun Life Financial, a Canadian insurer, has agreed to buy a 51% interest in Crescent Capital Group, an alternative credit investment manager for up to USD 338 million (an upfront payment of USD 276 million and a future payment of USD 62 million based on achievement of certain milestones). Crescent had about USD 28 billion in assets under management at the end of June 2020.
Deals On The Table
Nordic Capital, a private equity firm, is said to be exploring a potential sale of Itiviti Group, an electronic trading platform. The deal could be expected to fetch about USD 1 billion. Itiviti generates more than EUR 200 million in annual sales.
AIG is said to be planning to separate its life insurance unit from its broader property and casualty business. The life insurance business accounts for about 1/3 of group revenue.
Source: FT, WSJ
Aegon, a Dutch insurer, is said to have put its Eastern European business up for sale. The unit is primarily focused on Hungary, but is also active in Poland, Romania and Turkey. The business could be valued at about EUR 650 million and is being sold as part of an auction process.
Wells Fargo, a US lender, is said to be exploring a sale of its asset management business. The unit managed USD 578 billion on behalf of customers at the end of June 2020 and could fetch more than USD 3 billion in a sale.
Kotak Mahindra Bank, an Indian lender backed by Uday Kotak, is said to be exploring a takeover of IndusInd Bank, a smaller rival. A combined entity will create the nation’s 8th largest financial firm by assets.
Ant Group, a China’s payment services provider, is said to have priced the shares in its IPO that value the company at USD 34.4 billion.
Deutsche Bank, a German lender, is said to be “in talks” to sell Postbank Systems, its IT services division, to Tata Consultancy Services, an Indian company.
Not So Fast
Visa Inc’s, a payment processor, USD 5.3 billion deal to buy Plaid, a fintech startup, which was announced in January 2020, is facing antitrust scrutiny at the US Justice Department.
The Money Trail
Barclays Bank, a UK lender, has raised GBP 400 million through a green bond issuance, which will be used to finance or re-finance mortgages in energy efficient residential properties.
Skin in the Game
Goran Persson, Swedbank’s (a Nordic lender) chairman, has bought 10,000 shares in the bank after the bank released its Q3 2020 report, thus increasing his holding to 35,000 shares.
Metrics To Watch
Deutsche Bank’s return on tangible shareholder equity rose to 1.5% in Q3 2020, far from its 2022 target of 8% and well below its cost of capital.
Banco Santander, a Spanish lender, trades at slightly less than 0.4x times tangible book value.
Root, a loss-making online insurer, has raised USD 663.7 million in an IPO that was priced above the marketed range and giving the company a market value of USD 6.7 billion. The company was valued at USD 3.65 billion in its most recent equity fundraising round in August 2019.
The number of direct lending deals, in which funds make loans that would traditionally be made or arranged by banks, completed in Europe fell by 29% in H1 2020 compared with the same period last year, according to Deloitte.
A Thought Worth Noting
“The macroeconomic outlook is uncertain and we cannot rule out a weak recovery with a significant build-up of bad loans.”
Andrea Enria, head of supervision, European Central Bank
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