Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
Citigroup has agreed to sell its Australian consumer business to National Australia Bank for about USD 882 million. The equity value implies a multiple of 8x times the net profit after tax for the 12 months to June 2021.
Robinhood Markets has agreed to buy Say Technologies, a provider of software which helps company shareholders with voting and communication, in an all-cash deal valued at approximately USD 140 million.
Truist Financial Corp has agreed to buy ECN Capital Corp service finance business for USD 2 billion. ECN Capital acquired Service Finance Holdings for USD 327.53 million in cash in 2017.
Brookfield Asset Management’s reinsurance unit has agreed to buy American National Group, an insurer, for about USD 5.1 billion in an all-cash deal.
Dai-ichi Life Holdings has agreed to buy the life insurance business of Westpac, an Australian banking group, for about USD 665.5 million.
ESR Cayman has agreed to buy ARA Asset Management, a real estate fund manager, for USD 5.2 billion (of which 90% paid in stock). The deal is expected to create the 3rd largest listed real estate investment manager in the world with USD 129 billion in assets under management.
Deals On The Table
Freedom Acquisition I, a special purpose acquisition company, is said to be in “exclusive talks” to merge with Credijusto, a Mexican fintech group, and CIAL Dun & Bradstreet, a Latin American corporate data provider, in a deal that could value the combined entity at around USD 1.5 billion.
Nubank, a Brazilian digital bank backed by Warren Buffett’s Berkshire Hathaway, is said to be preparing for a US initial public offering which could value the company at more than USD 40 billion. In June 2021 Nubank raised USD 750 million in a funding round valuing it at USD 30 billion.
TypTap, an insurtech, is said to be preparing for an initial public offering. Founded in 2016, TypTap provides homeowners and flood insurance in the US. In February 2021 the company raised USD 100 million with an implied post-money valuation of about USD 850 million.
Kakaobank, a South Korean digital lender, has become the country’s biggest local bank by market capitalisation at USD 32 billion. Its shares trade at 11.3x times price to book, compared with KB Financial, South Korea’s biggest traditional financial group, at 0.47x.
FalconX, a cryptocurrency and digital-asset trading platform, has raised USD 210 million in a funding round which values it at USD 3.75 billion. The company claims that its revenue have grown by a multiple of 30x times in the 12 months to June 30, 2021, and that its customer-triggered monthly transaction volume has reached over USD 10 billion.
The market capitalisation of Europe’s publicly listed residential property sector has grown from EUR 3.5 billion in 2006 to nearly EUR 85 billion at the end of July 2021, according to the European Public Real Estate Association.
A Thought Worth Noting
“The truth is that it has become exceedingly difficult to topple an established banking franchise. The barriers to entry in global banking have become so large – between intense regulation, huge capital requirements, giant balance sheets, and client loyalty – that they have become cartel-like fortresses.”
William Cohan, a former investment banker and author
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