Industry Trends
Genstar Capital’s Obsidian Insurance Group Acquires Western Home Insurance
Genstar Capital, through its Obsidian Insurance Holdings, Inc., has announced the acquisition of Western Home Insurance Co. This acquisition will support Obsidian’s growth goals. While it is atypical for a PE group to own an insurance company, Genstar’s ownership and financial backing will provide Obsidian infrastructure and access to Western Home Insurance’s California marketplace.1
SEC Focuses in on SPAC Deal Structure
The SEC is investigating whether SPAC fee structures incentivize banks to complete undesirable deals in the advisory and underwriting process. The current process allows banks to participate in both the eventual acquisition deal and advisory role, thus earning SPAC and target company fees. This creates a conflict of interests as banks may over or understate certain strengths and weaknesses in the process, potentially harming investors. As of now, banks are not required to disclose their fees in the SPAC filings. Banks have started to reevaluate their processes and increase due diligence, signaling possible regulations soon.2
J.P. Morgan Acquires Timberland Investment Firm
The Wall Street firm has acquired Campbell Global LLC, a firm that manages $5.3 billion worth of timberland. This move coincides with the growing forest-carbon offset market. Offsets pay landowners to leave trees standing, so they soak up carbon from the atmosphere. This move corresponds to many large companies pledging to reduce their carbon footprint.3
China Shuts Down Bitcoin Mine, Eliminates $400 Billion in Value
China recently ordered a Bitcoin mining hub to shut down, causing the cryptocurrency market to lose approximately $400 billion in value. Bitcoin dropped eight percent in value in 24 hours. China is trying to control non-regulated and non-central banking and financial systems.4 5
Major Cyber Insurance Companies Coordinate Efforts
Cyber insurers AIG, AXIS, Beazley, Chubb, The Hartford, Liberty Mutual Insurance, and Travelers have formed a new company, CyberAcuView, to pool data and research. This company will compile and analyze cyber-related data. This new company will also invite other cyber insurers to be associate members. The announcement comes as a result of increased cyber threats.6
Challenger Bank to Go Public Via SPAC
Challenger Bank and the Dave's personal finance app will go public with a $4 billion valuation via a SPAC. The app has 10 million customers, and the company’s digital bank, Dave Banking, has 1.3 million customers. Some of the app’s highlights include small loans to prevent overdraft fees and credit-building tools. As consumers become more concerned with their finances in the wake of the coronavirus and its impacts on the economy, this deal provides funding for a widely-used consumer banking tool.7
Old National and First Midwest Announce Merger
Old National Bancorp (NASDAQ: ONB) and First Midwest Bancorp, Inc (NASDAQ: FMBI) announced an agreement to merge banks. This merger will create a Midwestern bank with $45 billion in assets. United, the banks' footprint will increase to the sixth-largest Midwest bank due to the deal and allow the company to expand the retail banking and technological capabilities of the merged company. As customers want more from digital banking and the convenience of many retail locations, this merger provides excellent value for the banks’ customers.8
Largest Transactions Closed
- Target
- Buyer
- Value($mm)
- BBVA USA Bancshares, Inc.
- The PNC Financial Services Group, Inc.
- $11,567.00
- Metropolitan Property And Casualty Insurance Company
- Farmers Group, Inc.
- $3,940.00
- Certain U.S. Property And Casualty Business Of Farmers Group, Inc.
- The Farmers Exchanges
- $1,510.00
- FBL Financial Group, Inc.
- Farm Bureau Property & Casualty Insurance Company
- $580.00
- NORCAL Mutual Insurance Company
- ProAssurance Corporation
- $524.00
- Title365 Inc
- Blend Labs, Inc.
- $450.00
- American Access Casualty Company/Newins Insurance Agency Holdings, LLC
- Kemper Corporation
- $370.00
- Protective Insurance Corporation
- The Progressive Corporation
- $338.00
- Corporate Solutions Life Reinsurance Company
- Venerable Insurance and Annuity Company
- $300.00
- Certain HSA Assets of HealthcareBank
- WEX Inc.
- $250.00
Source S&P Capital IQ as of 7/15/2021 and PCE Proprietary Data
Contacts
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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 Sources:
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