Catella
Catella - Strategic review now finalised (ABG Sundal Collier)
2018-12-19 13:31
News-packed couple of weeks for Catella
Card Issuing operations sold to Advanzia Bank
The strategic review is now complete
A busy couple of weeksIt has been a news-packed couple of weeks for Catella. On 12 December the company announced a strategic partnership to divest 51% of its Wealth Management (WM) operations in Sweden to Söderberg & Partners, for ~SEK 36 million. The transaction is expected to close in March/April. The companies have further entered into an option agreement to sell/buy each other’s JV shares in 2024. This was the remaining part of the WM operations since Catella at the end of Oct. announced that it will sell its Luxembourg WM operations to VP Bank for ~SEK 110m. That transaction is expected to close in Q1’19. Separately, on 13 December, Catella announced the completion of its deal to buy 75% of APAM, the UK real estate investment and asset management company. Catella has received regulatory approval for a price corresponding to GBP 18m. APAM had revenues of ~GBP 7m in ’17.
Strategic review completed, Card Issuing divested
On 18 December, Catella announced the final piece of the puzzle in its strategic review, disclosing that it will divest its Card Issuing operations in Luxembourg to Advanzia Bank for a fixed fee of ~SEK 120m, with an additional earn-out structure of max ~SEK 240m. The fixed fee will be paid during Q1’19, and the additional earn-out before the end of ‘19. Given this divestment, the strategic review is now complete, and the banking operation in Catella is expected to close during 2019.
Positive, banking segment had been a drag for years
Catella says that it will soon provide more detail on how much it expects the strategic review to affect its capital requirements, P&L and future regulation. We see these divestments, as we have stated before, as clearly positive for the share. The banking segment has tied up regulatory capital for the group and been a drag on earnings for a number of years, with only small visible synergies (
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