Banking, Finance & Insurance Q3 2019

Banking, Finance and Insurance Q3 2019

M&A Transaction Trends

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)

Source S&P Capital IQ as of 10/10/2019 and PCE Proprietary Data

M&A Industry Trends

Will Computers Replace Investment Bankers in the IPO Market?

After multiple failures this year in the IPO market, hundreds of venture capital firms have started to discuss the effectiveness of the current IPO model. Venture Capital firms are using computer algorithms to sell companies at an optimal price. This high-tech approach replaces the typical process of of investment bankers buying shares and then selling them to investors at a specific price the night before the IPO.1

"SAFE Banking Act" Lights up the Cannabis Industry

On September 25th, the House of Representatives passed the “SAFE Banking Act,” the first standalone marijuana reform bill to ever clear a chamber of Congress. It aims to protect financial institutions and ancillary firms that defend marijuana businesses from criminal prosecution and other consequences. It also provides stability and security to the multibillion-dollar cannabis industry.2

China Leading the Way for Digital Currency

Central banks across the world, including the U.S Federal Reserve, are embracing the idea of “digitizing” their currencies. Digital currencies allow for faster and cheaper money transfers across borders, as well as increased oversight for governments. The People’s Bank of China is leading this trend by being the first to launch a digital version of their national currency late this year or early 2020.3

Financial Advisers Keeping up With The Times by Offering College Planning Services

Changing demographics has forced the role of the financial advisor to adapt. Many fintech startups have slashed trading fees, thus drastically decreasing advisor margins. Due to an increased demand for money managers who specialize in college counseling services, some financial advisers are expanding their services to include writing financial aid applications, rearranging assets for financial aid, consulting on college applications and even helping the children of clients pick majors and internships.4

Cyrptocurrency Theft Prompts the Birth of Crypto Insurance

With a market cap of $300 billion, cryptocurrencies have become a target of hackers. Nearly an estimated $480 million was stolen in crypto currency in the first half of 2019. In response, large insurance firms such as Lloyd’s of London, are beginning to offer crypto insurance to companies like Coinbase and BitGo. The business of insuring these crypto assets is expected to grow 20-25% faster than the cybersecurity insurance sector as a whole.5

Largest M&A Transactions Closed

Target Buyer Value($mm)
Rabobank, National Association Mechanics Bank $2,100.00
Fidelity Southern Corporation Ameris Bancorp $749.00
Hospitals Insurance Company, Inc./FOJP Service Corporation The Doctors Company $650.00
National Teachers Associates Life Insurance Company Horace Mann Educators Corporation $405.00
EMC Insurance Group Inc. Employers Mutual Casualty Company $356.00
MBT Financial Corp. First Merchants Corporation $294.00
Heritage Bancorp (Reno, Nevada) Glacier Bancorp, Inc. $241.00
MidSouth Bancorp, Inc. Hancock Whitney Corporation $217.00
HopFed Bancorp, Inc. First Financial Corporation $135.00
Pegasus Bank BancFirst Corporation $124.00

Source S&P Capital IQ as of 10/10/2019 and PCE Proprietary Data

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Contacts

David Jasmund

 

David Jasmund

Investment Banking | ESOP

 

407-621-2111

djasmund@pcecompanies.com

Michael Poole

 

Michael Poole

Investment Banking | ESOP

 

407-621-2112

mpoole@pcecompanies.com


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. Basak, S. (2019, September 30). Silicon Valley Investors Call Summit to Disrupt IPO Business. New York, NY, USA, Bloomberg News.
  2. Adams, M. (2019, September 24). You Should Know This About the Marijuana Industry’s SAFE Banking Bill. U.S.A.
  3. Vigna, D. M. (2019, September 22). The Coming Currency War: Digital Money vs. the Dollar. Washington, D.C, U.S.A.
  4. Zuckerman, L. B. (2019, August 23). Financial Advisers Now Help with College Plans, Family Counseling, Cremains. New York, New York, U.S.A.
  5. Kauflin, J. (2019, September 5). Lloyd’s Of London, Aon And Others Poised to Profit From Cryptocurrency Hacker Insurance. New York, New York, USA.
Andre Sutherland

 

Andre Sutherland

Valuation

Orlando Office

407-621-2119 (direct)

asutherland@pcecompanies.com

Connect
407-621-2119 (direct)

407-621-2199 (fax)

Daniel Kvarnberg

 

Daniel Kvarnberg

Valuation

Orlando Office

407-621-2132 (direct)

dkvarnberg@pcecompanies.com

Connect
407-621-2132 (direct)

407-621-2199 (fax)

David Jasmund

 

David Jasmund

Investment Banking | ESOP

Orlando Office

407-621-2111 (direct)

djasmund@pcecompanies.com

Connect
407-621-2111 (direct)

407-621-2199 (fax)

Eric Zaleski

 

Eric Zaleski

Investment Banking | ESOP

Chicago Office

847-239-2466 (direct)

ezaleski@pcecompanies.com

Connect
847-239-2466 (direct)

407-621-2199 (fax)

Melissa Ritter

 

Melissa Ritter

Investment Banking

Orlando Office

407-621-2128 (direct)

mritter@pcecompanies.com

Connect
407-621-2128 (direct)

407-621-2199 (fax)

Michael Rosendahl

 

Michael Rosendahl

Investment Banking

New York Office

201-444-6280 Ext 1 (direct)

mrosendahl@pcecompanies.com

Connect
201-444-6280 Ext 1 (direct)

407-621-2199 (fax)

Will Stewart

 

Will Stewart

Investment Banking | ESOP

Orlando Office

407-621-2124 (direct)

wstewart@pcecompanies.com

Connect
407-621-2124 (direct)

407-621-2199 (fax)

whitcomb-woody

 

Woody Whitcomb

Investment Banking

Orlando Office

407-621-2113 (direct)

wwhitcomb@pcecompanies.com

Connect
407-621-2113 (direct)

407-621-2199 (fax)

poole_michael

 

Michael Poole

Investment Banking

Orlando Office

407-621-2112 (direct)

mpoole@pcecompanies.com

Connect
407-621-2112 (direct)

407-621-2199 (fax)

vogt-paul

 

Paul Vogt

Valuation

Atlanta Office

678-641-4760 (direct)

pvogt@pcecompanies.com

Connect
678-641-4760 (direct)

407-621-2199 (fax)

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