Deutsche Bank AG has agreed to buy Numis Corp., one of the best-known UK boutiques, in an all-cash deal that could reshape the landscape of investment banking in the City of London.
(Bloomberg) — Deutsche Bank AG has agreed to buy Numis Corp., one of the best-known UK boutiques, in an all-cash deal that could reshape the landscape of investment banking in the City of London.
The German lender will pay 350 pence a share, valuing Numis at about £410 million ($512 million), according to a statement by Deutsche Bank Friday. The price represents a 72% premium to their closing price the previous day.
Under the terms, 339 pence will be paid out in cash, and the rest will be paid in two rounds of interim dividends, conditional upon the transaction becoming effective, according to the statement.
The acquisition will help Deutsche Bank engage deeper with corporate clients in the UK and meet the financial and advisory needs of more than 170 customers. The lending giant said the deal offers a “strategic opportunity” to combine Deutsche Bank’s existing UK and Ireland corporate finance business with Numis to create “a leading force in UK investment banking.”
“We have been evaluating how to accelerate the growth of our business in the UK,” Fabrizio Campelli, who oversees Deutsche Bank’s corporate and investment banking activities, said in the statement. “The combination enables us to realize greater revenue opportunities across our shared client base and to deepen our engagement with UK corporates.”
For Numis, the offer from Deutsche Bank comes after a tough year for City of London firms, with a sharp downturn in capital markets hitting various British brokers hard. Numis said in February it had seen “very subdued levels of equity issuance and corporate activity” in recent months, as moribund capital markets continued to weigh on revenue.
Deutsche Bank Chief Executive Officer Christian Sewing is seeking to boost business with large companies as a way to grow now that its dominant fixed-income trading business is facing stagnating or even declining revenue. He also said Thursday that he wants to add to the lender’s advisory capabilities despite announcing a plan to cut 800 senior back-office staff.
Read More: Deutsche Bank Plans More Job Cuts After Traders Trail Peers
The Frankfurt-based lender has managed to draw a line over the past few years under an era of scandals and deep losses and its rising profitability means it can finally afford to make acquisitions, at least smaller ones, without tapping shareholders for fresh cash.
Numis employs 344 people, almost all of them in London. Its investment banking division offers services including corporate broking and advisory. Its equities arm offers services like sales and research and includes a team of 36 research analysts covering more than 300 companies.
The deal is expected to close in the fourth quarter and Deutsche Bank anticipates that the transaction start being “EPS accretive” in 2024, according to the statement. Deutsche Bank said it intends to co-brand with Numis.
Numis directors plan to unanimously recommend that shareholders vote in favor of the transaction.
(Updates with details.)
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