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Spaxs has acquired 72% of Banca Interprovinciale

13 April, Milano Finanza

The team of Corrado Passera has analysed 100 dossiers, has performed a due diligence on 12 Italian banks, has narrowed down the selection to 5 and has short-listed 3 candidates. Today, the company has chosen Banca Interprovinciale from Modena, a small bank with 300 members. The bank is led by Umberto Palmieri, it has been operating since 2009 in the SME segment and has assets for one billion euro and an equity equal to 60 million. With only 7 branches and 62 employees in total, the bank has a cost-income ratio equal to 51%, one among the lowest in the Italian banking sector. To have an idea, an excellent bank such as Intesa Sanpaolo has closed 2017 with a cost-income ratio equal to 50.9%. Excellent gross NPL ratio, 5.4% at the end of 2017, aligned with the European parameters, while the Italian average is nearly the double.

Spax aims at a business combination by the end of July, moving in this way from the AIM segment where it’s currently listed since February to the MTA segment in the Milan Stock Exchange. The Spac has been acting very quickly, having raised by January 2017 600 million euro after it got listed, and now it has announced the business combination nominating the target company. We must wait about two months for the authorization process to be completed by mid-June. Then, the assembly of members will gather for the merger and by July the company will be ready to move to the main list as a listed bank.

The agreement includes the acquisition of 91.4% of the registered capital of Banca Interprovinciale amounting to 51.2 million euro, corresponding to the 100% revaluation of Banca Interprovinciale equal to 56 million. 72% of the capital will be purchased cash and 19.4% by transferring a maximum of 987,128 new shares issued by Spaxs for a value of 11 euro per share (the shares issued at a value of 10 euro were traded for about 10.3 euro on 13th April).

Concerning the remaining 8.6% of the capital of Banca Interprovinciale, the agreement implies the possibility of additional subscriptions at a later moment. In any case, Spaxs will acquire all the notes issued by the bank.

The project launched by Passera includes the creation of an innovative bank dedicated to the SME segment, operating in the non-performing loans market and offering highly-digitalised banking services to families and enterprises.

Spaxs hasn’t exceeded 10% of the capitals raised (600 million euro) to acquire the bank. The remaining capitals will be used to develop the business plan. Moreover, the current ordinary shareholders won’t be excessively diluted with the business combination since 72% of the registered capital of Banca Interprovinciale will be acquired cash rather than using shares, as it was initially evaluated. If the acquisition had been carried out using shares, the current shareholding base would have been diluted by 10%, as reported by the investor presentation. With the mix of 72% cash and 28% shares, the dilution drops below 2%.

The bank has closed 2017 with total gross debts for 18 million euro, equal to a 5.4% gross Npe ratio. The value net of adjustments (53.3% for non-performing loans, 33.4% for unlikely to pay) of the net impaired loans held by Banca Interprovinciale is equal to 3.1% of the assets. The Common Equity Tier 1 ratio (Cet 1) was equal to 17.3% in December 2017, above the national average and way above the minimum capital parameters set by the Surveillance Authority. Last year, Banca Interprovinciale reported revenues for 20 million euro, operational costs for 10.1 million euro, cost of credit for 97 basis points, reporting net profits for 3.4 million euro, corresponding to a 6% Roe.

Banca Imi has acted as Global Coordinator for the OPA, covering the role of Nominated Adviser and Specialist on behalf of Spaxs. The company was assisted by the legal firm Studio Carnelutti for the M&A and the due diligence, along with the firm Morpurgo for the matter regarding employment law, the firm Gatti Pavesi Bianchi concerning the market and the Stock exchange, the firm Freshfields Bruckhaus Deringer for the banking regulation aspects, the firm Ludovici Piccone & Partners for what concerns taxation, the firm Ernst & Young for the due diligence on Banca Interprovinciale, the firm The Boston Consulting for the development of the operational plan and the firm Morrow Sodali regarding governance. Banca Interprovinciale was assisted by the legal firms Lawpartners and Tributario.  MC Square Group was the financial advisor for the operation.

Source: Milano Finanza

Translator: Cristina Ambrosi

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