European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

Trading Above Terms at the Start of the Tender Offer Period

Event-Driven

ION Capital and Singapore's sovereign wealth fund GIC <a href="https://company.cerved.com/sites/company.cerved.dev/files/102%20vF%20ENG.pdf" target="_blank" rel="noopener">have offered to acquire</a> Italian financial services group <a href="https://www.smartkarma.com/entities/cerved-information-solutions-s" target="_blank" data-smartkarma-citation="entities:21171:1" rel="noopener">Cerved Information Solutions S (CERV IM)</a> for €1.86 bn.
<ul>
<li>The duo, operating through an entity that is 85.75% owned by trading software and financial data provider ION and 10% owned by GIC, has bid €9.50 per share, a 34.9% premium to the share price on 5 March.</li>
<li>ION said it plans to support Cerved's current business plan if it acquires the company. Italy-based FSI has agreed to to underwrite the deal up to €150 million.</li>
</ul>
Cerved said on 7 March that it was in conversations with unnamed private equity firms for the sale of its bad loan collection unit, Cerved Credit Management Group Srl. The news had already sent the shares up by c. 15%.
Pignataro, owner of ION Capital, usually purchases when he sees low growth and stagnant share prices, then he applies aggressive cost cuts. Cerved's credit management division is the third largest bad debt collector in Italy. The risk management business offers credit parameters to about 40% of the market. Demand has already increased with the granting of state-backed aid loan banks.
There is a minimum acceptance condition of more than 90%, antitrust approval and approval from Office of the Italian Prime Minister.
In the current bid, the premium-implied cost cuts, approximately €50 mn euros per year (about 18% of COGS) seem already ambitious. Although much of the potential cost cuts is already reflected in the premium, the shares closed at €9.63 on 10 March, suggesting the possibility of a counterbid or a sweetened offer.
Cerved has closed on 10 January at €9.63, c. 1.4% above the offer price. This could suggest that ION's offer is opportunistic, despite offering a c. 35% premium over the share price and 11.6x EV/Fwd EBITDA. This valuation is the highest since end of January 2018, when Cerved was trading close to 13.4x.
Recommendation is Long Cerved, TP €10.0 (11.9x EV/Fwd EBITDA).

ION Capital and Singapore's sovereign wealth fund GIC have offered to acquire Italian financial services group Cerved Information Solutions S (CERV IM) for €1.86 bn.

The duo, operating through an entity that is 85.75% owned by trading software and financial data provider ION and 10% owned by GIC, has bid €9.50 per share, a 34.9% premium to the share price on 5 March.
ION said it plans to support Cerved's current business plan if it acquires the company. Italy-based FSI has agreed to to underwrite the deal up to €150 million.

Cerved said on 7 March that it was in conversations with unnamed private equity firms for the sale of its bad loan collection unit, Cerved Credit Management Group Srl. The news had already sent the shares up by c. 15%.
Pignataro, owner of ION Capital, usually purchases when he sees low growth and stagnant share prices, then he applies aggressive cost cuts. Cerved's credit management division is the third largest bad debt collector in Italy. The risk management business offers credit parameters to about 40% of the market. Demand has already increased with the granting of state-backed aid loan banks.
There is a minimum acceptance condition of more than 90%, antitrust approval and approval from Office of the Italian Prime Minister.
In the current bid, the premium-implied cost cuts, approximately €50 mn euros per year (about 18% of COGS) seem already ambitious. Although much of the potential cost cuts is already reflected in the premium, the shares closed at €9.63 on 10 March, suggesting the possibility of a counterbid or a sweetened offer.
Cerved has closed on 10 January at €9.63, c. 1.4% above the offer price. This could suggest that ION's offer is opportunistic, despite offering a c. 35% premium over the share price and 11.6x EV/Fwd EBITDA. This valuation is the highest since end of January 2018, when Cerved was trading close to 13.4x.
Recommendation is Long Cerved, TP €10.0 (11.9x EV/Fwd EBITDA).

Cerved Group - Castor Srl: Sweet Opportunity in Loans Gone Sour

Cerved Group S.p.A.

Cerved Group - Castor Srl: Sweet Opportunity in Loans Gone Sour