Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
HSBC agreed to buy Axa’s insurance business in Singapore for USD 575 million. The acquisition will give HSBC the 8th largest life insurer in Singapore, as well as a leading group health insurance firm, with assets of USD 474 million.
Source: FT, Bloomberg
Willis Towers Watson agreed to sell its global treaty reinsurance brokerage business to Arthur J. Gallagher & Co, an insurance broker, for USD 3.25 billion in cash. Willis Re treaty insurance brokerage generated USD 745 million of estimated revenue in 2020.
Deals On The Table
Hagerty, an insurer, is said to have agreed to go public through a merger with SPAC Aldel Financial in a deal that values it at USD 3.13 billion. Launched in 1984, Hagerty provides insurance cover for collectible vehicles that are not driven daily.
Metrics To Watch
Western Union has an enterprise value 2x times estimated revenues for next year and 8x times earnings before interest, tax, depreciation and amortisation. The equivalents for Wise, a UK-based fintech, are 18x times sales and 75x times ebitda.
Uala, an Argentine fintech which offers debit cards and a digital payments service tied to a global Mastercard, raised USD 350 million in its latest funding round that allowed it to reach a USD 2.45 billion valuation. The company was valued at USD 900 million in 2020.
Aspiration Partners, a California-based fintech startup which provides banking services, credit cards and investment products, is said to be planning to go public through a merger with SPAC InterPrivate III Financial Partners in a deal that values it at USD 2.3 billion.
At the start of the year, the S&P 500 was trading at 22.7x times projected profits over the next 12 months. Thanks to earnings growth outpacing gains in the broad market, this measure has moderated to 21.1x times but remains above its average of 18.1x over the past 5 years.
According to Refinitiv data, the total value of pending and completed M&A deals announced in 2021 globally has already touched USD 3.6 trillion year-to-date, surpassing the full-year tally of USD 3.59 trillion in 2020.
A Thought Worth Noting
“You now have the two largest economies in the world slowing down – one by design in the case of China and the other by circumstance in the case of the US.”
Malcolm Freeman, director, Kingdom Futures
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