Goldman Sachs to acquire NNIP

BY Richard Summerfield

The Goldman Sachs group has agreed to acquire NN Investment Partners from NN Group N.V. for around $1.98bn. The transaction is expected to close by the end of the first quarter of 2022, subject to regulatory and other approvals and conditions.

The deal will essentially double Goldman Sach’s European assets under supervision to about $600bn and will bring “great cross-selling opportunities” for Goldman Sachs Asset Management, according to Julian Salisbury, head of Goldman Sachs Asset Management.

“This acquisition allows us to accelerate our growth strategy and broaden our asset management platform,” said Mr Salisbury. “NN Investment Partners offers a leading European client franchise and an extension of our strength in insurance asset management. Across NN Investment Partners’ offerings they have been successful in integrating sustainability which mirrors our own level of ambition to put responsible investing and stewardship at the heart of our business.”

The deal also enhances Goldman Sachs’ global position as it boosts the firm’s fund management and distribution with $355bn in assets under management and about $70bn in assets under advisement. The acquisition of NNIP is the biggest deal by Goldman Sachs since David M. Solomon became chief executive in 2018.

Under the terms of the deal, NNIP’s 900 employees will join Goldman Sachs and the Netherlands will become “a significant location” in the firm’s European operations. Furthermore, the two companies will enter a 10-year strategic partnership under which Goldman will provide asset management services to NN Group on an investment portfolio of $190bn, the companies said in a statement.

“NN Group and NN Investment Partners have a longstanding and successful shared history,” said David Knibbe, chief executive of NN Group. “We value this strong and constructive relationship that we have and we look forward to further building on it in a new form. This transaction brings together two international asset managers, each with many decades of investment experience. We have found a strong and professional partner in Goldman Sachs, providing an environment in which our NN Investment Partners colleagues can continue to thrive, while the combined investment expertise and scale will enhance the service offering to NN Investment Partners’ clients, including NN Group.

“This transaction will also give NN Group greater optionality to develop a broader range of asset management propositions for our customers.,” he continued. “Our approach and ambitions around ESG will remain unchanged and Goldman Sachs shares our commitment to responsible investing.”

News: Goldman Sachs to buy Dutch asset manager NNIP for around $2 billion

Out of this world: Virgin Orbit goes public in $3.2bn SPAC deal

BY Fraser Tennant

In a $3.2bn deal that will make it a publicly-traded company, satellite-launch services provider Virgin Orbit is to merge with special purpose acquisition company (SPAC) NextGen Acquisition Corp. II.

Under the terms of the definitive agreement, the transaction is expected to provide the combined company up to $483m in cash proceeds, including up to $383m of cash held in the trust account of NextGen and a $100m fully committed private investment in public equity (PIPE). Additionally, the combined company will retain the Virgin Orbit name and is expected to be listed on Nasdaq under the ticker symbol ‘VORB’. 

Operating one of the most flexible and responsive satellite launchers ever invented, in just a span of four years Virgin Orbit has developed a proprietary air-launch technology, coupled with world-class manufacturing infrastructure and a proven team to transform space access for a diverse and global customer base.

“We have built Virgin Orbit in order to change the business of satellite launch and to open space for everyone, globally,” said Dan Hart, chief executive of Virgin Orbit. “Our success in launch has driven the business forward, and we are driving innovation with world-class design and advanced manufacturing capabilities, our unrivalled mobility of launch, and our exciting space solutions services.”

The boards of directors of both Virgin Orbit and NextGen have unanimously approved the proposed merger.

“We are delighted that our search for a great company, with strong organic growth in a large and growing market, disruptive technology and a world class management team has led to our partnership with Virgin Orbit,” said George Mattson and Greg Summe, co-founders of NextGen. “The space economy is developing rapidly, and Virgin Orbit is well positioned to benefit through its ability to competitively launch at any time, from any place on Earth, to any orbit and inclination.”

The merger is expected to be completed in Q4 2021 subject to, among other things, the approval by NextGen’s shareholders and the satisfaction or waiver of other customary closing conditions.

Sir Richard Branson, founder of Virgin Orbit, concluded: “I am very excited we are taking Virgin Orbit public, with the support of NextGen. It is another milestone for empowering all of those working today to build space technology that will positively change the world.”

News: Branson's Virgin Orbit to go public through $3.2 bln SPAC merger

Logistics giant DPDHL acquires ocean freight firm Hillebrand in €1.5bn deal

BY Fraser Tennant

Strengthening its position in the ocean freight forwarding market, global logistics company Deutsche Post DHL Group (DPDHL) is to acquire freight forwarder J.F. Hillebrand Group AG.

Under the terms of the agreement, DPDHL will acquire up to 100 percent of Hillebrand and its subsidiaries at an equity value of around €1.5bn. DPDHL intends to fund the acquisition with available cash.

“With the growing maturity of our freight forwarding business, this bolt-on acquisition of Hillebrand is highly complementary to our existing portfolio,” said Frank Appel, chief executive of DPDHL. “In line with our group strategy, we strengthen our core logistics business and deliver profitable long-term growth. Using our financial strength, we are able to pursue quality investments while reinforcing our unchanged commitment to deliver on investor return expectations.”

A global service provider specialising in ocean freight forwarding, transport and logistics of beverages, non-hazardous bulk liquids and other products that require special care, Hillebrand generated revenue of around €1.4bn in the last 12 months and has more than 2700 employees worldwide.

Focusing on core logistics is a key element of DPDHL’s ‘Strategy 2025’, with priority for selected inorganic growth given to specific, strategically relevant activities.

As well as boosting DPDHL’s position in the market, Hillebrand will benefit from DPDHL’s global forwarding, freight division’s large-scale network in over 190 countries and global forwarding expertise in air, ocean and road freight to ensure strong development opportunities for the business and its employees.

“The two companies are a perfect match, and we are pleased to announce our agreement to unite and form a future together,” said Cees van Gent, chief executive and chairman of Hillebrand.  “I am proud of what the Hillebrand teams in true collaboration with our loyal customers and vendors have built over our 177-year history and we now look forward to joining forces with DPDHL.”

The transaction is subject to merger control clearance in certain jurisdictions, including the European Union (EU) and the US.

Tim Scharwath, chief executive of DPDHL’s global forwarding, freight division, concluded: “Hillebrand is an exceptional opportunity and an excellent fit with our strategy.”

News: Deutsche Post to acquire sea freight forwarder Hillebrand for $1.8 billion

Cobham agrees $3.6bn Ultra deal

BY Richard Summerfield

Cobham, the private equity-owned aerospace and defence group, has agreed to buy rival firm Ultra Electronics for $3.6bn in the latest takeover of a UK engineering specialist.

Under the terms of the deal, Ultra shareholders will receive £35 a share as well as an interim cash dividend of 16.2p due next month, valuing the company at £2.57bn. The price is a 63 percent premium to Ultra’s closing price on 24 June before the first bid from Cobham, at £28 a share.

“We believe Cobham and Ultra’s complementary capabilities delivering mission critical technology will be significantly enhanced through the combination of the two groups, enabling the development of higher performance solutions for our customers,” said Shonnel Malani, chairman of the Cobham Group. “We recognise the important role that a combined Cobham and Ultra will play in ‘five-eyes’ defence and are committed to protecting the continuity of supply to the UK and our allies. We look forward to working with HM Government, and other relevant stakeholders, to agree legally binding commitments which safeguard Ultra’s contribution to the UK economy and national security.”

“The Ultra Board is confident of Ultra’s future prospects as an independent listed company and its ability to deliver excellent and sustainable value for all its stakeholders,” said Tony Rice, chairman of Ultra. “The Ultra Board is also extremely pleased with the excellent progress that the management team is making on executing the ONE Ultra strategy and the Focus; Fix; Grow transformation programme. This was clearly recognised and part of the rationale behind Cobham’s interest in Ultra and enabled the Ultra Board to review Cobham’s unsolicited approaches from a position of strength.”

“This combination will enhance Ultra’s prospects through Cobham’s stated intentions to accelerate our transformation, invest in our technology, and to continue to support our customers, operations, communities, and most importantly our talented and committed people,” said Simon Pryce, chief executive of Ultra.

The UK government has been “closely monitoring” the potential sale of Ultra since the company’s board announced in July that it intended to recommend the takeover if Cobham could provide safeguards to the government and other stakeholders. To that end, Cobham has vowed to safeguard and support the UK’s national security and create new manufacturing and engineering jobs and apprenticeships. The company will also protect existing jobs, maintain a UK headquarters and boost investment in the country.

News: Defence firm Cobham to buy UK rival Ultra in $3.6 billion deal

TCF to buy ECN Capital’s Service Finance business

BY Richard Summerfield

Truist Financial Corp has agreed to acquire the Service Finance business of ECN Capital Corp in a deal worth $2bn.

Following the closing of the transaction, which is expected in the fourth quarter of 2021, subject to standard licensing and regulatory approvals, as well as compliance with customary closing conditions, ECN Capital intends to pay a special dividend of C$7.50 per common share or approximately US$1.5bn from the net proceeds to its common shareholders.

Service Finance, which provides home improvement loans, operates solely in the US and has underwritten more than US$7bn in loans since it was founded in 2004. ECN acquired the company in 2017 for US$304m.

“The acquisition of Service Finance expands the scale and capabilities of our wholesale payments businesses, enabling Truist to deliver innovative financing solutions to Service Finance’s nationwide network of dealers and serve homeowners across the country,” said Mike Maguire, head of national consumer finance and payments at Truist. “This acquisition significantly strengthens Truist’s leadership position in the rapidly growing POS industry, and we’re excited to partner with Mark Berch and the entire Service Finance team.”

“Service Finance’s client-centric model, coupled with Truist’s financial strength and commitment to POS lending, perfectly position us to continue to provide distinctive, secure and successful client experiences,” said Jeff McKay, head of Truist’s POS lending unit. “Just like Sheffield, Service Finance partners with leading brand names in their industry and has earned a reputation for unparalleled client service and delivering innovative solutions.”

“As a former home improvement contractor, I know how important it is to help contractors and their customers get access to convenient and attractive financing so our end-customers can spend more time enjoying the moments that matter, in the place that matters the most – their homes,” said Mark Berch, president and founder of Service Finance. “This is a dynamic market with tremendous potential, and joining Truist only improves our outlook for growth.”

As a result of the deal that was entered into with Truist, ECN received fully subscribed agreements from its senior lenders for the modification of its existing senior credit facility following the closing of the transaction. ECN Capital’s existing senior credit facility will be modified and restated to provide a total of US$700m in revolving financing for a period of four years from the closing date of the transaction. The Canadian Imperial Bank of Commerce will act as the managing agent and syndication agent, and the Bank of Montreal will act as the collateral agent.

Truist, the eighth-largest bank in the US, was formed in 2019 from the merger of BB&T and SunTrust.

News: TCF buys ECN Capital's service finance business for $2 billion