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Exit and Growth Strategies for Middle Market Businesses

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Banking Relationships and the Small Business Owner

By David Sinyard | Apr 16, 2020

I have previously written about the importance of maintaining good banking relationships.  The recent Covid-19 emergency financing reinforces this need.  As of today, April 16, 2020 the program is out of money unless the government agrees to additional funding.  Millions of applications were filed under this program.  Many will not receive funding.  Those that will are companies that have very good banking relationships.  Their bankers made it a priority to get these loans approved.  A friend of mine is a senior executive with a regional bank.  Their staff worked through the Easter weekend to process loans – ultimately 6000 loans worth $1.2 billion will be funded.  Anecdotally, I know of many who applied and were not processed.  Why?  The importance of the relationship.  These PPP loans are 100% guaranteed by the government, meaning the banks will not suffer any losses. Much is being made currently about the “Main Street Loan” program.  These loans require the banks share 5% of the risk.  The effect of this requirement will be that these loans will be made to borrowers with whom the bank has good relationships.  Good luck to those who don’t.


M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | Feb 14, 2020

The report below gives a good overview of the first quarter M&A activity in the Financial Services Industry Sector. M&A activity for North American based target companies in the Financial Services sector for Q3 2019 included 224 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions in the sector was announced in October when Redwood Trust, Inc. acquired CoreVest American Finance Lender, LLC from Fortress Investment Group LLC, ultimately owned by SoftBank Group Corp, for US$492 million with an undisclosed amount in cash and stock, subject to adjustments. CoreVest American Finance Lender is located in Irvine, California and provides loans to residential real estate investors.

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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Sinyard | Feb 14, 2020

The report below gives a good overview of the first quarter M&A activity in the Hospitality and Leisure Industry Sector. M&A activity for North American based target companies in the Hospitality and Leisure sector for Q4 2019 included 64 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions in the sector was announced in December when Maybourne Hotels Ltd, a subsidiary of Constellation Hotels Holding Ltd, acquired Montage Hotels & Resorts LLC from Ohana Real Estate Investors LLC, ultimately owned by Orei Advisors LP for approximately US$415 million. Maybourne Hotels owns and operates hotels. Montage Hotels & Resorts owns and operates hotels, resorts and residences. It operates portfolio of hotels, resorts and residences such as Montage Laguna Beach, Montage Beverly Hills, Montage Deer Valley, Montage Kapalua Bay, Montage Palmetto Bluff and Montage Los Cabos. The company was founded in 2002 and is headquartered in Laguna Beach, CA.

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M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | Oct 21, 2019

The report below gives a good overview of the fourth quarter M&A activity in the Financial Services Industry Sector. M&A activity for North American based target companies in the Finance sector for Q3 2019 included 247 closed deals, according to data published by industry data tracker FactSet.

One One of the notable middle market transactions in the sector closed in July when Colony Capital, Inc. acquired Digital Bridge Holdings LLC for US$325 million in cash, stock and contingent payout. Under the terms of transaction, Colony Capital would pay US$195 million in cash, US$97.5 million in stock and US$32.5 million in contingent payout as based on expiration of certain customary seller indemnification obligations, to Digital Bridge Holdings. The acquisition enhances Colony Capital’s portfolio of products and service offerings. The acquisition is in line with the growth strategies of Colony Capital to increase its digital world and infrastructure market. Digital Bridge Holdings engages in the acquisition, funding, and management of companies from the communications infrastructure sector.

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M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | Jul 29, 2019

The report below gives a good overview of the third quarter M&A activity in the Financial Services Industry Sector. M&A activity for North American based target companies in the Financial Services sector for Q2 2019 included 220 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when Intertrust NV acquired Viteos Fund Services, LLC, a portfolio company of FiveW Capital, LLC and PPC enterprises, LLC, for US$330 million in cash. Intertrust engages in the provision of private client, capital markets, corporate and fund services. Viteos Fund Services provides accounting, middle- and back-office outsourcing and licenses its platform to investment managers. The company was founded in 2003 and is headquartered in Somerset, NJ.

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M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | Apr 19, 2019

The report below gives a good overview of the second quarter M&A activity in the Financial Services Industry Sector. M&A activity for North American based target companies in the Financial Services sector for Q1 2019 included 187 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in February when Mercer Global Advisors, Inc., a subsidiary of Mercer Advisors, Inc., acquired Arbor Asset Management LLC for US$350 million. The transaction allows Mercer Global Advisors to further expand its existing business operations. Founded in 1996, Arbor Asset Management is located in Ann Arbor, Michigan and provides investment advice.

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M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | Feb 06, 2019

The report below presents you with a good overview of the first quarter M&A activity in the Financial Services Industry Sector. M&A activity for North American based target companies in the Financial Services sector for Q4 2018 included 208 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was closed in December when Stone Point Capital, LLC acquired Rialto Capital Management, LLC from Lennar Corp for US$340 million. The acquisition enables Stone Point Capital to further expand its business portfolio. Rialto Capital Management is located in Miami, Florida and acts as an alternative investment manager. Stone Point Capital is a global private equity firm located in Greenwich, Connecticut that manages the Trident Funds.

Industry Indicators

  • US corporate profits, an indicator of corporate demand for financial planning and investment advising, rose 10.3% in the third quarter of 2018 compared to the same period in 2017.
  • The bank prime loan rate, a tool for financial planners and investment advisers was 5.25% as of the week of December 12, 2018, up from a rate of 4.5% the same week in 2017.
  • US personal income, which is a driver for financial planning and investment services, rose 4.3% in October 2018 compared to the same month in 2017.
  • Total US revenue for other financial investment activities, which includes financial planners and investment advisors, rose 4.9% in the third quarter of 2018 compared to the previous year.

Posted by David Sinyard.

Read the Entire Financial Services 1st Quarter Newsletter Here


M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | Oct 15, 2018

The report below gives a good overview of the fourth quarter M&A activity in the Financial Services Industry Sector. M&A activity for North American based target companies in the Financial Services sector for Q3 2018 included 268 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in August when Xome, Inc., a subsidiary of WMIH Corp, acquired the business and assets of Mortgage Solutions business of Assurant, Inc. for US$35 million in cash. Under the terms of the agreement, Xome paid US$35 million in cash and an undisclosed amount in contingent payout to the shareholders of Assurant. The acquisition would allow Xome to expand its product offerings. The transaction is expected to be accretive to the earnings of WMIH Corp in 2019.

The financial services sector has been significantly impacted by software and technology, which continues to evolve creating efficiencies and increasing profitability.

 

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M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | Aug 07, 2018

The report below presents you with a good overview of the third quarter M&A activity in the Financial Services Industry Sector. M&A activity for North American based target companies in the Financial Services sector for Q2 2018 included 206 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when 360 Treasury Systems AG, a subsidiary of Deutsche Börse AG, acquired Gain GTX LLC from GAIN Capital Holdings, Inc. for US$100 million in cash, subject to a customary adjustment. The transaction allows Deutsche Börse AG to provide financial flexibility to enhance its investment opportunities. Following the transaction, the GTX ECN business will be integrated into Deutsche Börse’s 360T forex unit. Gain GTX LLC is located in Bedminster, New Jersey and provides foreign exchange services.

Household wealth continues to rise across North America, Western Europe and Asia, which has bolstered the financial services sector.

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M&A Quarterly News In The Financial Services Industry Sector

By David Sinyard | May 04, 2018

The report below presents you with a good overview of the second quarter M&A activity in the Financial Services Industry Sector.  M&A activity for North American based target companies in the Financial Services sector for Q1 2018 included 163 closed deals, according to data published by industry data tracker FactSet.

One of the notable transactions of the quarter was announced in January when Imperalis Holding Corp. acquired The Crypto Currency Mining Co, Inc. for US$175.3 million in stock. The acquisition would enable Imperalis Holding Corp to expand its crypto business. The Crypto Currency Mining Co. provides bitcoin mining services. Bitcoin is a peer-to-peer electronic cash system and is operated by a software that process transactions, secure the network, and keep the system synchronized.

Crypto currency trading was uneven in Q1 as prices swung heavily from month to month.

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