Pitch Best Deal 2020: Blackstone – NIBC
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Name of the deal: Blackstone Tactical Opportunities Fund acquires NIBC Holding NV
Date: Announced 7 August 2020, Closed 7 September 2020
Published value: €1.03 Billion
Buyer(s): Blackstone
Target: NIBC Bank
M&A Database: View more details of this deal
Involved firms and advisors sell side:
BofA Securities (M&A Advisory), Allen & Overy (Legal Advisory Corporate M&A)
Involved firms and advisors target:
Morgan Stanley (M&A Advisory), PwC (Tax Advisory), Alvarez & Marsal (Financial Due Diligence), Clifford Chance Amsterdam (Legal Advisory Corporate M&A), Blackstone (PE Management)
Involved firms and advisors buy side:
NautaDutilh (Legal Advisory Corporate M&A), JC Flowers (PE Management), Bank of America (M&A Advisory)
Pitch
Brief description deal / Deal outline:
Blackstone (through its special purpose vehicle Flora Acquisition B.V.) – with the support of NIBC's two largest shareholders, J.C. Flowers & Co and Reggeborgh Invest – launched a recommended all-cash public offer for all NIBC shares. The offer is an all-cash public offer for all issued and outstanding shares in the capital of NIBC that would result in the public shareholders receiving EUR 7.53 per share in aggregate, consisting of an offer price of EUR 7.00 per share and payment by NIBC of the 2019 final dividend of EUR 0.53 per share prior to or on settlement of the offer to public shareholders. The offer values NIBC at EUR 1.03 billion (excluding the 2019 final dividend).
The NIBC boards unanimously and fully support the transaction and recommend the offer for acceptance to the shareholders of NIBC. The Offer is supported by NIBC’s two largest shareholders, J.C. Flowers & Co (JCF) and Reggeborgh Invest B.V. (Reggeborgh),
representing 60.6% and 14.7% of the Shares respectively and 75.3% in aggregate. JCF and Reggeborgh have irrevocably undertaken to tender their shares under the offer.
They will have the right to collect the final dividend of EUR 0.53 per share at such time that in the opinion of the NIBC boards payment is feasible and appropriate in light of the impact of COVID-19 on the business or when NIBC or NIBC Bank pays another dividend or capital distribution to its shareholders or repurchases any of the shares in its capital.
Why should this deal win the Award for Best Deal 2020?
One of the largest deals in 2020, Public-to-Private that was renegotiated successfully to reflect impact from COVID on the business. Great outcome both for Sellers and Acquirers as well as the management team as the bank can now look forward to a successful future of further expansion.
This is the first takeover of a Dutch bank with a transaction value in excess of EUR 1 billion since ABN AMRO in 2009. The deal was originally announced on 25 February 2020, at a time when COVID-19 was not yet widespread in the Netherlands. The pandemic and its impact on the global economy at large as well as the (volatile) debt and equity capital markets environment brought parties back to the negotiation table to agree on revised ‘post-corona’ deal terms, which increased deal certainty against an unprecedented economic and market backdrop. The rules / recommendation regarding dividend distributions by financial institutions during COVID-19 added a further
layer of complexity to this transaction.
Paulus de Wilt, CEO and Chairman of the Managing Board of NIBC: “We are excited to announce an important next step for the future of our company with the launch of the Offer today. As we navigate unprecedented times, we are proud that we have been able to continue our dynamic and agile approach that allows us to successfully capitalize on evolving market opportunities across our corporate client franchise where we focus on niche, underserved or granular markets as well as in our retail client franchise where we have a strong foothold in the Dutch mortgage market. With Blackstone, NIBC will have a strong partner to support our strategy through the current challenging environment and continue to seek to innovate through new avenues of growth, including our recent partnerships with a number of Fintech companies and our evolving Originate-to-Manage product”
Deal rationale:
NIBC plans to increase its growth rate with Blackstone involved, specifically by increasing its business loan portfolio and mortgages business.
Blackstone is committed to supporting and accelerating NIBC’s existing strategy and to ensuring the long-term interests of all NIBC’s stakeholders, including its employees and clients. NIBC’s dynamic and agile approach allow it to successfully capitalize on evolving
market opportunities across its corporate franchise where it focuses on niche, underserved or granular markets as well as in its retail franchise where it has a strong foothold in the Dutch mortgage market. NIBC continuously seeks to innovate through new avenues of growth. Blackstone intends to work together with NIBC to accelerate this strategy, and support the company through its next phase of development. With Blackstone, NIBC will be equipped to build on its strategy focused on providing an attractive retail offering, growing its Originate-to-Manage platform and transforming and growing its corporate lending in niche segments of the markets. Blackstone’s
support will also enable NIBC to further invest into new ventures and Fintech driven initiatives, and enhances career development opportunities for NIBC employees. Blackstone has committed to support NIBC in furthering its current commitment to corporate social responsibility.
Dick Sluimers, Chairman of the Supervisory Board of NIBC: “It is with great satisfaction that we announce this important milestone for NIBC today. The Supervisory Board has closely monitored global developments that evolved over the past months, thoroughly reviewed and assessed the Offer and in light of its fiduciary duties, considered the interests of all stakeholders. The Offer provides minority shareholders with a fair cash price and a certain delivery of the 2019 Final Dividend, while at the same time facilitating an exit for JCF. NIBC is appreciative of the support and stewardship it has received from its controlling shareholder JCF for over 15 years and the collaborative effort of JCF and its representatives to grow NIBC into the business it is today. NIBC is also grateful for the support of Reggeborgh since the IPO. Blackstone will provide further support for NIBC’s strategy and a solid basis to secure the long-term interests of NIBC, our employees, deposit holders and clients”
What is the impact of this deal for the company?
The NIBC boards unanimously and fully support the transaction and recommend the offer for acceptance to the shareholders of NIBC. The Offer is supported by NIBC’s two largest shareholders, J.C. Flowers & Co (JCF) and Reggeborgh Invest B.V. (Reggeborgh),
representing 60.6% and 14.7% of the Shares respectively and 75.3% in aggregate. JCF and Reggeborgh have irrevocably undertaken to tender their shares under the offer. Blackstone has committed to support NIBC in furthering its current commitment to corporate social responsibility.
Blackstone's support will enable NIBC to make further investments (including in fintech driven initiatives) and build on its strategy. Settlement of the offer is expected in 2020. If the offeror acquires at least 95% of the NIBC shares, the offeror will commence
statutory squeeze-out proceedings to obtain the remaining NIBC shares. If the offeror acquires more than 85% but less than 95% of the NIBC shares, then an asset sale followed by a liquidation may be implemented.
The buyer will not close or dispose of any business operated by NIBC, unless proposed by the Managing Board, and will continue to apply the names and logos of the brands of NIBC; and NIBC will remain prudently capitalised and funded to safeguard business continuity, and continue to operate within management's target funding and liquidity ratios, with the current credit rating as an important anchor point.
What is the impact of this deal for the direct stakeholders?
Blackstone's support enhances career development opportunities for NIBC employees.
For NIBC shareholders, the all-cash public offer for all issued and outstanding shares in the capital of NIBC would result in the public shareholders receiving EUR 7.53 per share in aggregate, consisting of (i) an offer price of EUR 7.00 per share and (ii) payment by
NIBC of the 2019 final dividend of EUR 0.53 per share prior to or on settlement of the offer to public shareholders. The offer values NIBC at EUR 1.03 billion (excluding the 2019 final dividend). The bank will be taken private and hence the bank will be allowed to execute its strategy with more focus on the long term rather than keeping public shareholders happy on a quarterly basis.
Current rights and benefits of NIBC’s employees, existing pension rights of NIBC’s current and former employees and existing social policies and social plans will be respected by the buyer; and the buyer will also recognise existing rights and arrangements with the works council and employment applicable legislation.
What is the impact of this deal on society?
Significant: the bank has now the ability to grow faster with the support of a large PE fund backing its strategy rather than being limited in its growing plans as a listed bank.
The buyer will support NIBC in furthering its current commitment to corporate social responsibility and ensure it fosters a culture of excellence.
What was most complex about this deal?
Being in the media multiple times, the sale of NIBC to Blackstone requires little additional background to amplify it's complexity and therefore the excellent fit to be nominated as Best Deal of the Year. Numerous stakeholders, being listed, the Covid-19 impact all added to the complexity of the deal. When part of the Blackstone portfolio NIBC would like to leverage the knowledge of Blackstone to enter and exit specific niches which arise as a result of standardisation within the larger banks. NIBC's management will remain in place after the acquisition.
The deal was originally announced on 25 February 2020, at a time when COVID-19 was not yet widespread in the Netherlands. The pandemic and its impact on the global economy at large as well as the (volatile) debt and equity capital markets environment brought parties back to the negotiation table to agree on revised ‘post-corona’ deal terms, which increased deal certainty against an unprecedented economic and market backdrop. The rules / recommendation regarding dividend distributions by financial institutions during COVID-19 added a further layer of complexity to this transaction.
