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David Jasmund

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Industry Trends

Federal Reserve Raises Rates by 0.75 Percentage Points

Following May’s higher-than-expected inflation rate, the Federal Reserve in June raised the benchmark for the federal funds rate by 0.75 percentage points. The increase is the highest rate hike since 1994 as officials attempt to combat the highest inflation in more than 40 years. The Fed signaled a similar rate increase between 50 and 75 basis points seems the most likely for their next meeting at the end of July as inflation remains high.1

IPO Market Slows as Companies Wait For Markets to Stabilize

High inflation, recession fear, and volatile markets have slowed the IPO market in 2022 to a near standstill. By mid-June, only 47 companies had listed their shares through a traditional IPO, down 74% from the same period in 2021. Currently, more than 300 companies are on hold with their IPOs, waiting for the markets to stabilize. According to Deloitte executives, the first few listings will need to perform well in the market to restore investor confidence.2

SEC to Crack Down on Payment For Order Flow Practice

The SEC plans to overhaul retail stock trading rules, creating the biggest shake-up of U.S. equity market rules in over a decade. Specifically, the SEC plans to target the payment for order flow practice in which retail brokers get compensated for routing customer orders directly to a particular market maker. The new rules, aimed at ensuring retail investors receive the best price available, are expected to call for more disclosure on the practice.3

Insurance M&A Slows in First Half of 2022, Expected to Pick Up

The insurance industry experienced slow M&A activity during the first half of 2022 following rising interest rates, inflation, and geopolitical risk. In May, the six-month transaction volume totaled 343, down 28% from the previous period. Q2 showed an even greater contraction with only 27 announced deals from the end of March to mid-May. However, strong interest from PE-backed buyers is expected to drive an increase in acquisition activity for the remainder of 2022.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • People's United Financial, Inc.
  • M&T Bank Corporation
  • $7,604.92
  • American National Group, Inc.
  • Brookfield Asset Management Reinsurance Partners Ltd.
  • $5,110.51
  • Investors Bancorp, Inc.
  • Citizens Financial Group, Inc.
  • $3,727.65
  • Full Service Retirement Business of Prudential Financial, Inc.
  • Empower Retirement, LLC
  • $3,550.00
  • Prudential Annuities Life Assurance Corporation
  • Fortitude Group Holdings, LLC
  • $1,500.00
  • TriState Capital Holdings, Inc.
  • Raymond James Financial, Inc.
  • $1,142.53
  • Bank Leumi Le-Israel Corporation
  • Valley National Bancorp
  • $1,137.67
  • Happy Bancshares, Inc.
  • Home Bancshares, Inc. (Conway, AR)
  • $895.20
  • Spirit of Texas Bancshares, Inc.
  • Simmons First National Corporation
  • $565.94
  • Level One Bancorp, Inc.
  • First Merchants Corporation
  • $353.48
  • Westwood Insurance Agency, Inc.
  • BRP Group, Inc.
  • $274.36
  • Columbian Mutual Life Insurance Company
  • Constellation Insurance Holdings, Inc.
  • $100.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • GoAuto LLC / Adaptive Information Technologies, LLC
  • Milestone Partners Management Co., L.P.
  • n/a
  • Celtic Capital Corporation
  • Fourshore Partners
  • n/a
  • Medical Reimbursements of America, Inc.
  • Growthcurve Capital, LP
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Legacy Bank
  • InBank
  • $56.02
  • Iowa First Bancshares Corp.
  • MidWestOne Financial Group, Inc.
  • $47.03
  • First Community Bancorp, Inc.
  • Eagle Bancorp Montana, Inc.
  • $41.30
  • FCB Financial Services, Inc
  • Southern Bancorp, Inc
  • $28.00
  • Tempo Bank
  • Scott Credit Union
  • $14.25
  • Assets of Barra & Associates, LLC
  • Reliance Global Group, Inc.
  • $7.50

 

Source S&P Capital IQ as of 7/8/2022 and PCE Proprietary Data

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Contacts

David Jasmund

Orlando Office

407-621-2111 |

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Michael Poole

Orlando Office

407-621-2112 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. Timiraos, Nick. “Fed Raises Rates by 0.75 Percentage Point, Largest Increase Since 1994.” The Wall Street Journal, 15 June, 2022.
  2. Beltran, Luisa. “Failure to Launch: IPOs Are on Hold Until Markets Stabilize.” Barron’s, 20 June, 2022.
  3. Johnson, Katanga & Mccrank, John. “U.S. SEC chief unveils plan to overhaul Wall Street stock trading.” Reuters, 8 June, 2022.
  4. “Insurance: Deals 2022 midyear outlook.” PwC, 23 June, 2022.

 

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