Mergermarket Financial Services M&A Forum

Financial Services M&A Forum 2017

November 16, 2017 | Financial Services M&A Forum 

Financial services M&A activity is likely to remain steady through the rest of 2017 using data from the first half of this year as a measuring stick. The first six months of 2017 saw 253 deals announced compared to 277, 324 and 279 transactions in the same period for 2016, 2015 and 2014, respectively. However, what makes M&A forecasting difficult is the uncertainty around regulatory reform and technology.

If the Choice Act, which overhauls the Dodd-Frank law, becomes law (awaiting a vote in Senate and President Donald Trump's signature) it could indirectly present corporate boardrooms and private equity firms with opportunities considered unfathomable just a year ago. Lesser known legislative initiatives, such as the CLEARR Act, could also set the stage for greater M&A activity than otherwise would happen under the current regulatory regime. Furthermore, adoption of cutting-edge technologies in blockchain, cryptocurrencies, robo-advisors, robo-traders, payment platforms and other pecuniary software will contribute to "creative destruction" within the financial sector, presenting unforeseen investment opportunities.

Join the Mergermarket team and esteemed panelists for a two-panel discussion in Financial Service industry investment and M&A trends.

    • 08:00

      Registration and Breakfast

    • 08:40

      Welcome Remarks

      Peggy Cohen
      Peggy Cohen
      Senior Vice President, Donnelley Financial Solutions
    • 08:45

      The Emerging Role of Data & Analytics in Financial Services M&A

      Ashkon  Farmand
      Ashkon Farmand
      Manager - Mergers, Acquisitions and Divestitures, Deloitte
      Frank  Moczulewski
      Frank Moczulewski
      Senior Manager - Mergers, Acquisitions & Divestitures, Deloitte & Touche LLP
    • 09:00

      Fireside Chat: Fintech Disruption Trends

      Matt Lytle
      Matt Lytle
      Executive Director, J.P. Morgan
      Craig  Clay
      Craig Clay
      President, Global Capital Markets, Donnelley Financial Solutions (moderator)
    • 09:30

      Subsector Trends and Changing Regulation Present Opportunities

      Among all industries, the financial services sector had the fifth-highest amount of activity in May, with 49 deals. Through July, financial services M&A ranks in the 3rd quintile among all sectors in terms of activity. Interestingly, it is estimated that average deal valuation for financial service M&A transactions ranged between USD 224.81m to USD 492m in 1H17, despite fewer deals. This represented a much higher range than previous years aside from 2015 when a couple of transactions were priced at USD 40bn+, skewing averages.

      Dealmakers expect asset management, fintech, community/regional bank and fixed income trading consolidation to accelerate, as a 1H17 Mergermarket survey found. Despite global private wealth rising to USD 166.5trn in 2016, the wealth management business continues to feel pressure to lower fees and commission from clients while facing competitive pressure from online brokers and fintech companies. Market observers are also speculating that deregulation and reform will spur dealmaking, specifically citing deductibility of interest expense, corporate tax rates, overseas cash repatriation and the potential cross-border adjustment tax.

      Panelists will discuss several trends in the financial services industry that could lead to high levels of M&A activity, including:

      • Examining M&A trends in asset management deals, such as integration planning (e.g. standalone vs. merging), transitional service agreements, cost synergies, IT legacy systems, etc.
      • What challenges are acquirers coming across in regards to a target's operational stability, controlling its finances and operations, retaining clients and initiating synergies?
      • State of credit markets for financial services M&A.
      • Discussing potential rollbacks of Dodd-Frank law and how much commercial bank consolidation will it stoke?
      • What will be the impact from the Treasury Department and Federal Reserve plans of reduction in regulations?
      Halle  Benett
      Halle Benett
      Managing Director, Melody Capital Partners
      Jeb B. Doggett
      Jeb B. Doggett
      Managing Director, Deloitte
      James Mayne
      James Mayne
      Director, Credit Suisse
      Ernest  Wechsler
      Ernest Wechsler
      Partner, Kramer Levin Naftalis & Frankel LLP
      Danny  Rodriguez
      Danny Rodriguez
      Principal, Lee Equity Partners
      Kate  Jenkinson
      Kate Jenkinson
      Editor, Acuris Studios (moderator)
    • 10:30

      Coffee Networking Break

    • 11:00

      Private Equity's Favorite Financial Assets

      Over the past several years, private-equity sponsored M&A in the financial services industry has remained steady with transaction count of 40 or slightly above. In the largest financial service acquisition of 2017 thus far, Kohlberg Kravis Roberts & Co.'s purchase of USI Holdings Corporation, a provider of property and casualty insurance and employee benefits services, for US$4.3bn illustrates an interesting trend: The insurance industry's reoccurring revenue model, strong margins and small capex requirements have made it a favorite target among buyout shops.

      Delegates will listen to panelists discuss how and where private equity firms are sourcing deals in the financial service industry, covering topics such as:

      • Identifying subsectors within the insurance industry that offer the most opportunity over the next 12 months.
      • Exploring what acquisitions insurance companies themselves are targeting and how that makes them attractive for potential private equity owners.
      • What is private equity's value proposition for insurance and asset management companies?
      • Assessing performance of portfolio companies since going private in the last several years.
      Lou  Brothers
      Lou Brothers
      Senior Manager; Insurance M&A, West Monroe Partners
      Corey B.  Davis
      Corey B. Davis
      Managing Director, SenaHill Partners LP
      John  McNally
      John McNally
      Senior Vice President, JLT Specialty USA
      Daniel Perez
      Daniel Perez
      Director of Business Strategy, Venue Data Room, Donnelley Financial Solutions (moderator)
    • 12:00

      Conclusion of Event

      *Agenda subject to change.